In the current year, the Department for Promotion of Industry and Internal Trade (DPIIT) organized a series of meetings with investors and experts to discuss ways to increase Foreign Direct Investment (FDI). The November dialogue, led by Minister of Commerce and Industry Piyush Goyal, focused on simplifying and accelerating investment processes.
Key factors contributing to foreign investors' interest in India include an investor-friendly policy, effective regulation, and a high level of returns. Additionally, a skilled workforce, streamlined compliance procedures, and the decriminalization of minor offenses in the sector also play an important role.
In the 2024-25 fiscal year, the total FDI amounted to over $80.5 billion, despite global uncertainty. The World Investment Report 2025, prepared by UNCTAD, indicates a decline in global FDI flows by 11% to $1.5 trillion; however, stability is observed in developing countries, including India.
Major global companies such as Microsoft, Amazon, and Google have announced significant investments. Microsoft CEO Satya Nadella stated the intention to invest $17.5 billion by 2030, aimed at developing infrastructure and opportunities for artificial intelligence in India. Amazon plans to invest $35 billion to expand its operations, including cloud technologies and AI, while Google is set to invest $15 billion to create an AI hub.
Apple is also increasing its presence in India, and Samsung is expanding its manufacturing capacity. ArcelorMittal Nippon Steel India plans to increase its production capacity of coated steel to 1 million tons by 2026, which is part of the overall economic growth that, according to the National Statistical Office, increased by 8.2% in the second quarter of 2025-26.
Experts emphasize that India’s strong economic fundamentals and consistent reforms will be key factors for the recovery of FDI in 2026. Deloitte India economist Rumki Majumdar noted that as economic ties diversify, India expects an influx of long-term investments in high-tech sectors.
Shardul Amarchand Mangaldas & Co partner Rudra Kumar Pandey added that FDI from Gulf Cooperation Council (GCC) countries is becoming an important source of investment, with the services sector remaining the most attractive for foreign capital.
Mauritius and Singapore lead among foreign investors in India, accounting for about 49% of total FDI, followed by the USA, Netherlands, Japan, and the UK. Key sectors attracting investments include services, software development, telecommunications, and automotive.
FDI is permitted in many sectors automatically, but in some, such as telecommunications and pharmaceuticals, government approval is required. In several areas, including gambling and tobacco manufacturing, FDI is prohibited.
Foreign direct investment plays a critically important role for India, providing essential funds for infrastructure development and sustaining economic growth, as well as contributing to the stability of the balance of payments and the exchange rate of the rupee.
Source: Times of India
