According to the United Nations, foreign direct investment (FDI) in India is set to increase by 44% to $39 billion in 2025, strengthening the country’s position as a leading global investment destination.The 2026 World Investment Report released on Tuesday by the United Nations Trade and Development (UNCTAD) said global FDI remained resilient through 2025, although the recovery remained fragile. According to the report, supported by a proactive policy framework aimed at diversifying investments beyond the services sector and accelerating the development of advanced manufacturing, India continued to strengthen its position as an attractive investment destination in 2025.
Increase in FDI inflows: Details decoded
Worldwide FDI inflows increased by 6% to $1.6 trillion, with developed economies recording an 11% increase and developing economies seeing a 2% increase.South Asia saw a sharp increase in FDI inflows, rising from $34 billion to $46 billion, mainly driven by India, where inflows increased to $39 billion, the report said. Additionally, UNCTAD observed that despite the increase in overall flows, project-related indicators suggest a more cautious investment climate.The value of announced greenfield investments in India declined to about $74 billion in 2025 from $111 billion last year, while the number of projects announced also declined amid an uncertain global economic backdrop.The report said India continued to take policy measures to attract investment in priority sectors such as electronics, semiconductors and allied manufacturing. Initiatives including production-linked incentive (PLI) schemes, Make in India, Start-up India and the National Industrial Corridor Development Program were cited as key drivers of this effort.It said India’s liberal FDI regime has enhanced the country’s attractiveness for foreign investors, while institutional mechanisms such as project development cells and project monitoring groups have been designed to expedite approvals and facilitate project execution.According to the report, these policy initiatives helped strengthen the investment momentum, especially in the manufacturing sector. Greenfield investments announced in the sector grew rapidly between 2021 and 2024, reflecting India’s growing role in selected sectors of global value chains, including electronics manufacturing.
speed medium
However, UNCTAD found that this pace slowed in 2025 amid a more uncertain global environment. Although total FDI inflows increased to $39 billion, project-related indicators point to a more cautious investment cycle. The total value of announced greenfield investments declined from more than $111 billion in 2024 to about $74 billion in 2025, while the number of projects recorded a slight decline.The slowdown was mainly concentrated in the manufacturing sector, where the value of announced investments fell from about $65 billion in 2024 to $27 billion in 2025. The sharpest decline was seen in capital-intensive industries. In many cases, the number of projects announced declined only slightly, indicating that projects were generally smaller in size rather than reflecting a significant reduction in investment commitments.Electronics manufacturing continues to rank among the largest manufacturing sectors in terms of both investment value and number of projects announced, although highs were seen in the past year, the report said.
