New Delhi: India attracted foreign direct investment (FDI) worth $81.04 billion in FY25, marking a 14% jump from the previous year and reaffirming its position as one of the world’s leading investment destinations. 

Data released by the commerce ministry on Tuesday showed the services sector emerged as the top recipient of FDI equity inflows, accounting for 19% of the total, with investments rising nearly 41% to $9.35 billion in FY25 from $6.64 billion a year earlier. 

It was followed by the computer software and hardware sector, which attracted 16% of inflows, and trading, with an 8% share.

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The figures point to the continued strength of India’s investor-friendly environment and growing appeal across key sectors such as services, manufacturing and technology.

India’s ambitions to become a global manufacturing hub also gained traction, with FDI in manufacturing rising 18% to $19.04 billion in FY25 from $16.12 billion in the previous year. 

This growth comes amid the government's push to boost domestic production under the 'Make in India' initiative and improved ease of doing business.

Maharashtra retained its lead as the top FDI destination, drawing 39% of total equity inflows, followed by Karnataka (13%) and Delhi (12%). Singapore remained the largest source of FDI into India, accounting for 30% of the total inflows, followed by Mauritius (17%) and the US (11%).

“India’s cumulative FDI inflow over the last eleven years (2014–25) has reached $748.78 billion, a 143% rise over the preceding eleven-year period (2003–14), which saw $308.38 billion. These figures underscore the long-term momentum in foreign investment, with nearly 70% of India’s total FDI over the past 25 years having been received during this period," the ministry said.

The number of countries investing in India also rose to 112 in FY25, compared with 89 in FY14.

Behind this steady surge in FDI are a series of liberalization measures and regulatory reforms. Between 2014 and 2019, India relaxed FDI norms across several sectors, including raising caps in defence, insurance and pension sectors and liberalizing rules for civil aviation, construction and retail, the commerce ministry said. 

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From 2019 to 2024, further steps were taken such as allowing 100% FDI under the automatic route in coal mining, contract manufacturing and insurance intermediaries. In a major reform announced in the 2025 Union Budget, the government proposed raising the FDI limit from 74% to 100% for insurance companies that invest their entire premium income within the country.

Mint first reported on 29 April that India is looking to strategically leverage its trade missions to position itself as a more attractive destination for foreign investment.

As per the Mint report, Indian missions abroad would be given the authority to grant in-principle approvals to FDI proposals in a move that could cut through bureaucratic hurdles. 

The Centre’s thinking–discussed in a high-level meeting involving key government ministries-comes in the backdrop of a global realignment of supply chains and keen interest from international businesses seeking manufacturing alternatives to China.

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FDI inflows into India peaked at $84.83 billion in the fiscal year 2021-22, as per data shared by minister of state for finance Pankaj Chaudhary in the Lok Sabha on 10 March. Thereafter, the numbers declined to $71.35 billion in FY23 and $71.27 billion in FY24, following uncertainty about a potential global recession, economic crises triggered by geopolitical conflicts and rising global protectionist measures.