India attracts record $ 90 billion FDI in 2025-26, outflows sign of healthy market, say Nivruti Rai, Invest India chief

National investment promotion and facilitation agency Invest India expects the country can attract $30 billion as foreign direct investment (FDI) into the country in the next three years from just four potential sectors.

The agency is betting high on the potential of four key sectors - Memory Fab, Pharma, Aerospace & Defence and Shipbuilding – to achieve its ‘$ 30 billion in 3 years’ target, says Nivruti Rai, MD & CEO of Invest India.

In an exclusive interaction with Fortune India, Rai said the country has seen record inflow of foreign investments in 2025-26. “The final numbers are yet to come, but our data so far indicates that in 2025-26, we must have got $ 90 billion as investments into the country, which is a $ 10 billion increase (over 2024-25)”, she said.

According to Rai, AI fuelled data centre demand should see Memory Fab sector attracting $ 10 billion as investments into the country in the next three years. Similarly, patent cliff, a term used to indicate nearing patent expiry of blockbuster medicines and heavy demand for bio-similars or generic drugs, could drive another $ 10 billion investment in the pharma sector she says. Aerospace and Defence, and Shipbuilding could also see heightened activities in India resulting in each sector attracting $ 5 billion, cumulatively contributing to Invest India’s $ 30 billion target, she explains.

Rai also says that the outflow of FDI, even a decline in net FDI, has to be seen as the strength of Indian market and not as flight of foreign investments. “Capital recycling is not capital flight. It’s what happens when a market matures enough to give investors their exit”, she says. Invest India’s analysis shows exits and re-entries of capital through deep IPO, private equity, and institutional markets are all signs of a healthy investment climate India has. Gross matters more than net FDI. Gross inflows are stable at $71–85 billion, Rai says. “A large US PE firm put $6 billion in India six years ago, it took $6 billion out, and still has $6 billion invested in India. That is the model. It is not capital flight, it is capital compounding”

Rai explains that net FDI has compressed because repatriation was roughly 2X and outward FDI by Indian companies was 3X even as inbound investments remained steady. “Both are signs of a mature, two-way capital market — not a market in flight”, she said.