New Delhi: India climbed two places to emerge as the 11th largest recipient of foreign direct investment (FDI) in 2025, with inflows rising 44% to $39 billion. The latest World Investment Report said the country is emerging as a preferred destination for investments in electronics, automobile materials and industrial manufacturing.The UNCTAD publication also said that India was the 18th largest foreign investor, moving up two places again, as outflows increased by 50% to $36 billion in 2025. Net inflows have declined as a result of large FDI outflows, which the government and economists have attributed to the growing global presence of Indian companies and their participation in global value chains (GVCs). “India has emerged as a major recipient due to its scale, rapidly growing digital demand, technological prowess and expanding markets for cloud services, while there has been sustained pressure towards facilitating investment in manufacturing through initiatives such as production linked incentive schemes,” the report said.
“The policy framework in India is oriented towards advanced manufacturing, infrastructure development and deeper integration into GVCs. However, tariff uncertainty, supply chain restructuring and weak global investment sentiment are impacting the scale of new manufacturing and infrastructure commitments,” it said.Alphabet’s $14.5 billion data center investment and Polish renewable energy company Hynefra’s $4.1 billion investment in India are among the top 10 greenfield project announcements, while Rana Group’s $10 billion investment in the auto parts sector in the UAE also features in the list.It also said that megaprojects, especially related to digital infrastructure, were a major emerging theme in FDI, with India being one of the beneficiaries along with Egypt, the UK and Brazil.The World Investment Report 2026 also pointed to changes in investment patterns between countries and regions. For example, since 2021, India had benefited from investments from the US, EU, South Korea and Japan, making it into the top five destination markets, but was missing out on China, perhaps due to investment checks imposed in 2020.In contrast, China slipped in terms of the EU and the US, pointing to a recalibration.
