FDI in India reaches $1 trillion, H1 FY25 sees 26% jump to $42.1 billion

Foreign Direct Investment (FDI) in India has hit the remarkable landmark of $1 trillion since April 2000, the Ministry of Commerce and Industry said on Thursday, December 12. The achievement was complemented by the 26% rise in FDI, reaching $42.1 billion, just in the first half of the current fiscal year.

This growth shows India’s potential as a global investment hub, driven by policy framework, dynamic business environment and increasing international competitiveness, the release stated.

FDI has played an important role in the country’s development by providing non-debt financial resources, creating jobs and boosting technology advancement.

In the last ten years, total FDI inflows jumped to $709.84 billion, which was 68.69% of the overall FDI inflows recorded in the past 24 years, the data showed.

As per RBI’s November bulletin, gross inward FDI in India increased to $42.1 billion in the first six months of the current financial year, as compared to $33.5 billion in the year-ago period.

Factors responsible for growth

The achievement in the FDI space, according to the government, can be attributed to:

• India has risen to 40th in the World Competitive Index 2024, up from 43rd in 2021. The country’s ranking in the Global Innovation Index also improved, from 81st in 2015 to 40th in 2023.

• India ranked third for greenfield projects, with 1,008 new project announcements. The country noted a 64% increase in international project finance deals.

• There has been significant improvement in the business environment in the country, jumping from 142nd to 63rd in the World Bank’s Doing Business Report between 2014 and 2020.

• The government has introduced investor-friendly policies, allowing up to 100% FDI in most sectors. Tax rules have also been simplified, including the abolition of angel tax and lower income tax rates for foreign companies.