Foreign Direct Investment Reaches $47.87 Billion in FY26, with US Inflows Nearly Doubling
Foreign direct investment (FDI) in India surged by 18% year-on-year, reaching $47.87 billion during the first nine months of the fiscal year 2025-26. This growth is largely attributed to a significant increase in inflows from the United States, which nearly doubled compared to the same period last year. Despite a quarterly decline in FDI inflows, the overall trend indicates a robust investment climate in India, with total FDI, including equity and reinvested earnings, also showing substantial growth.
Significant Growth in FDI Inflows
During the April-December period of the fiscal year 2025-26, FDI inflows into India rose to $47.87 billion, up from $40.67 billion in the same timeframe the previous year. The latest data indicates that the October-December quarter saw FDI equity inflows of $12.69 billion, marking a 17% increase year-on-year. However, this figure represents a notable decline of over 23% compared to the previous quarter, which recorded inflows of $16.55 billion. Overall, total FDI, which encompasses equity inflows, reinvested earnings, and other capital, increased by 17.4% to $73.31 billion, compared to $62.48 billion in the same period of 2024-25.
US and Singapore Lead FDI Sources
The United States emerged as a key player in India’s FDI landscape, with inflows rising sharply to $7.8 billion during the nine-month period, a significant increase from $3.73 billion in the previous year. Singapore retained its position as the largest source of FDI, contributing $17.65 billion. Other notable contributors included Mauritius at $4.83 billion, Japan at $3.2 billion, and the UAE at $2.45 billion. Cumulatively, the US has invested $78.46 billion in India since April 2000, making it the third-largest investor, following Singapore and Mauritius.
Sector-wise Distribution of FDI
In terms of sectoral contributions, the computer software and hardware sector attracted the highest FDI inflows, totaling $10.7 billion during the April-December period. The services sector followed closely with $8.42 billion, while trading attracted $3.36 billion. Other sectors such as non-conventional energy, construction infrastructure, automobiles, and chemicals also received significant investments, with inflows of $2.53 billion, $2.1 billion, $1.82 billion, and $702 million, respectively.
State-wise FDI Inflows
Maharashtra topped the list of states receiving FDI, attracting $15.38 billion. Karnataka followed with $11.2 billion, while Gujarat, Tamil Nadu, and Haryana received $5 billion, $3.89 billion, and $3.84 billion, respectively. Delhi and Telangana also saw substantial inflows, with $3.52 billion and $1.7 billion. The Indian government has implemented an investor-friendly FDI policy, allowing 100% overseas inflows in most sectors through the automatic route, further enhancing the investment environment in the country.
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