India's Foreign Direct Investment Surges 18% in First Nine Months of Fiscal 2025-26
Foreign direct investment (FDI) into India witnessed a robust 18 per cent year-on-year increase, reaching $47.87 billion during the April-December period of the 2025-26 fiscal year, according to government data released on Friday. This marks a significant rise from the $40.67 billion recorded in the same period of the previous fiscal year (FY24).
Quarterly Performance and Overall Growth
In the October-December quarter of 2025-26, FDI equity inflows showed a healthy 17 per cent year-on-year growth, amounting to $12.69 billion. However, this figure represents a decline of over 23 per cent compared to the preceding June-September quarter, which saw inflows of $16.55 billion.
When considering total FDI—which encompasses equity inflows, reinvested earnings, and other capital—the growth was similarly strong. Total FDI expanded by 17.4 per cent to $73.31 billion during April-December 2025-26, up from $62.48 billion in the corresponding period of 2024-25.
Top Source Countries and Cumulative Investments
Singapore maintained its position as the largest source of FDI during the period, contributing $17.65 billion. The United States saw a dramatic increase, with inflows nearly doubling to $7.8 billion from $3.73 billion in April-December 2024-25, making it the second-largest source.
Other significant contributors included:
- Mauritius: $4.83 billion
- Japan: $3.2 billion
- United Arab Emirates: $2.45 billion
- Netherlands: $2.29 billion
- Cayman Islands: $1.97 billion
- Cyprus: $1.4 billion
On a cumulative basis from April 2000 to December 2025, the US stands as the third-largest investor in India with total investments of $78.46 billion. Singapore leads with $192.53 billion, followed by Mauritius at $185 billion.
Sector-Wise and State-Wise Distribution
The computer software and hardware sector attracted the highest FDI inflows at $10.7 billion during April-December 2025-26. Other key sectors included:
- Services: $8.42 billion
- Trading: $3.36 billion
- Non-conventional energy: $2.53 billion
- Construction infrastructure activities: $2.1 billion
- Automobiles: $1.82 billion
- Chemicals: $702 million
Among Indian states, Maharashtra received the highest FDI inflow of $15.38 billion, followed by:
- Karnataka: $11.2 billion
- Gujarat: $5 billion
- Tamil Nadu: $3.89 billion
- Haryana: $3.84 billion
- Delhi: $3.52 billion
- Telangana: $1.7 billion
Government Policy and Historical Context
The Indian government has implemented an investor-friendly FDI policy framework, with most sectors open for 100 per cent overseas investment through the automatic route. Key reforms between 2014 and 2019 included increased FDI caps in defence, insurance, and pension sectors, along with liberalised policies for construction, civil aviation, and single-brand retail trading.
From 2019 to 2024, further measures allowed 100 per cent FDI under the automatic route in coal mining, contract manufacturing, and insurance intermediaries. In the last financial year (2024-25), FDI equity inflows stood at $50.01 billion, while overall FDI totalled $80.6 billion.
