With $39 billion FDI inflows, India was 11th most attractive FDI destination globally in 2025, says UNCTAD report

India recorded a 44% increase in foreign direct investment (FDI) inflows, helping drive growth in South Asia in 2025, says the just released World Investment Report 2026 of the UN Trade and Development (UNDP). With $39 billion FDI inflows (as against $27 billion in 2024), India was the 11th biggest FDI destination globally last year, the report said.

The report said India’s FDI performance was supported by an active policy agenda aimed at broadening its investment base beyond services and accelerating advanced manufacturing.

“To attract investment into priority industries, such as electronics, semiconductors and related manufacturing activities, the country launched programmes such as the Production-Linked Incentive schemes, Make in India, Start-up India and the National Industrial Corridor Development Programme. These initiatives have been complemented by reforms aimed at creating a more conducive investment environment, including the National Single Window System, the India Industrial Land Bank and continued efforts to reduce regulatory burdens. The reformed FDI regime has reinforced openness to foreign investors, while institutional mechanisms such as Project Development Cells and the Project Monitoring Group have aimed to facilitate approvals and project implementation," the report said.

However, it cautioned that which there was increase in FDI inflows, project indicators pointed to a more cautious investment cycle as the total value of announced greenfield investment declined from more than $111 billion in 2024 to about $74 billion in 2025, while the number of projects fell marginally.

The report, which draws its inputs from sources like the Reserve Bank of India, Ministry of Commerce and Industry, and the World Bank, said the slowdown was concentrated in manufacturing, where announced investment values fell from about $65 billion in 2024 to $27 billion in 2025. “The decline was most visible in capital-intensive sectors where investment values fell significantly. In many cases, project numbers declined only moderately, suggesting smaller project sizes rather than fewer commitments. Electronics-related manufacturing remained one of the largest manufacturing segments by value and number of projects, despite the decline from the previous year’s high," the report said.

Overall, the US received $277 billion and remained the most attractive FDI destination globally while developing Asia attracted $644 billion FDI in 2025 to remain the world's largest destination for FDI among developing regions last year. The FDI inflow to developing Asia represented about 40% of global FDI and more than 70% of flows to developing economies.