Foreign Direct Investment (FDI) inflows to India surged by 44% to $39 billion in 2025, according to the UNCTAD World Investment Report 2026. This increase helped India climb two places to become the world's 11th largest FDI destination. The robust growth was largely attributed to an active policy agenda aimed at broadening investment beyond services and accelerating advanced manufacturing, including initiatives like Production-Linked Incentive schemes and reforms to create a more conducive investment environment.
While overall FDI inflows improved, the report indicated a more cautious investment cycle, with the total value of announced greenfield investment in India declining from over $111 billion in 2024 to about $74 billion in 2025. This slowdown was particularly evident in manufacturing, where announced investment values fell from approximately $65 billion in 2024 to $27 billion in 2025. This suggests smaller project sizes rather than a significant reduction in overall commitments, with capital-intensive sectors experiencing the most notable declines.
Despite the decline in greenfield investments, megaprojects—especially in digital infrastructure—were a major emerging theme. Alphabet's $14.5 billion data center project in India was the largest announced greenfield investment globally, alongside Polish firm Hynfra's $4 billion project. Investment in services remained resilient, with Information and Communication Technologies (ICT) becoming the largest sector in 2025, reflecting continued expansion in digital infrastructure and technology-related activities. This resilience in digital infrastructure, supported by major tech companies like Amazon, Google, and Microsoft, played a crucial role in boosting India's FDI performance.
