FDI in India FY 2023-24: Top State and Sector Beneficiaries

Posted by Written by Melissa Cyrill Reading Time: 6 minutes

We discuss which Indian states and sectors received the most foreign direct investment (FDI) in FY 2023-24 and explain key trends observed. Overall, despite declines in comparative inflows, Maharashtra, Gujarat, and Karnataka remained top destinations while computer software & hardware and the services sectors remained top sector beneficiaries.


In the fiscal year 2023-24 (FY24), foreign direct investments (FDI) into India fell to a five-year low, recording a total inflow of US$44.4 billion. This marked a slight decline from the US$46 billion received in the previous fiscal year, influenced by global economic uncertainties and a growing trend of inward-looking capital allocation among nations.

Despite this overall dip, certain Indian states—namely Maharashtra, Gujarat, and Tamil Nadu—demonstrated resilience and growth in attracting FDI. In particular, Gujarat and Tamil Nadu benefited from their cluster-based industrial approach, covering a diverse range of sectors.

FDI Equity Inflow (Month-Wise) During the FY 2023-24

Financial year 2023-24

Amount of FDI equity inflow

April – March

(in INR billion)

(in US$ million)

1.

April, 2023

418.77

5,106

2.

May, 2023

220.55

2,678

3.

June, 2023

259.99

3,162

4.

July, 2023

209.17

2,546

5.

August, 2023

240.71

2,908

6.

September, 2023

339.57

4,089

7.

October, 2023

527.55

6,338

8.

November, 2023

236.28

2,837

9.

December, 2023

197.71

2,374

10.

January, 2024

498.29

5,995

11.

February, 2024

219.77

2,649

12.

March, 2024

310.63

3,742

Cumulative from April 2023 to March 2024*

3678.99

44,423

Cumulative from April 2022 to March 2023*

3674.35

46,034

Percentage growth over FY 2022-23

(+)0.13%

(-)3.49%

Notes:

  • * Figures are provision and subject to reconciliation with the Reserve Bank of India (RBI).
  • FEDAI (Foreign Exchange Dealers Association of India) conversion rate from INR to US dollar applied, on the basis of monthly average rate provided by RBI (DEAP), Mumbai.

Source: DPIIT

Indian states attracting the most FDI in FY24

Gujarat: A leading destination for FDI

Gujarat emerged as the top performer, drawing in US$7.3 billion in fresh FDI equity inflows, representing a remarkable 55 percent year-on-year growth. This surge enabled Gujarat to surpass both Karnataka and Delhi, securing the second spot in terms of total FDI inflows for FY24. The state’s success can be attributed to significant big-ticker investments, such as Micron’s new semiconductor plant.

READ MORE: Investment Spotlight on Western India: Gujarat vs Maharashtra

Growth in Tamil Nadu and Maharashtra

Tamil Nadu and Maharashtra also recorded growth in FDI inflows, with year-on-year increases of 12 percent and 2 percent, respectively.

Tamil Nadu’s rise, despite being positioned sixth in total FDI inflows at US$2.4 billion, was driven by marquee investments in the electronics manufacturing sector, such as the expansion of Foxconn and Pegatron’s electronics manufacturing facilities.

Maharashtra’s consistent performance reflects its status as a traditionally favored destination for foreign investments in India.

READ MORE: Investing in Tamil Nadu: Manufacturing Outlook and Opportunities

Declines in FDI numbers noted for Karnataka and Delhi

In contrast, Karnataka experienced a decline in FDI inflows, which fell by 37 percent year-on-year, continuing a downward trend since FY22. This decrease is largely attributed to a slowdown in startup funding and a perceived saturation in the state’s technology ecosystem. Delhi also saw a reduction in FDI inflows, declining by 13.4 percent, placing it fourth overall for FY24.

Telangana’s FDI surge

Telangana made key strides, doubling its FDI inflows to US$3 billion, securing the fifth spot in the rankings. This 132 percent surge year-on-year was fueled by substantial investments from companies like Amazon, highlighting the state’s growing appeal to foreign investors.

States in India Attracting the Highest FDI Equity Inflow

Rank

Sector

Amount in INR crore / US$ million

2021-22

(April-March)

2022-23

(April-March)

2023-24

(April-March)

Cumulative equity inflow

(April 2000 – March 2024)

Percentage out of total FDI equity inflow (in US$ terms)

1.

Maharashtra

INR crore

1,14,964

1,18,422

1,25,101

5,32,429

 

US$ million

15,439

14,806

15,116

69,087

30%

2.

Karnataka

INR crore

1,63,795

83,628

54,427

3,89,483

 

US$ million

22,072

10,429

6,571

51,031

22%

3.

Gujarat

INR crore

20,169

37,059

60,600

2,99,624

 

US$ million

2,706

4,714

7,300

39,201

17%

4.

Delhi

INR crore

60,839

60,119

53,980

2,44,073

 

US$ million

8,189

7,534

6,523

31,716

14%

5.

Tamil Nadu

INR crore

22,396

17,247

20,157

84,243

 

US$ million

3,003

2,169

2,436

10,938

5%

6.

Haryana

INR crore

20,971

20,735

15,797

75,270

 

US$ million

2,798

2,600

1,908

9,730

4%

7.

Telangana

INR crore

11,964

10,319

25,094

60,860

 

US$ million

1,607

1,303

3,029

7,774

3%

8.

Jharkhand

INR crore

48

44

90

19,382

 

US$ million

6

6

11

2,667

1%

9.

Rajasthan

INR crore

5,277

7,218

2,195

18,052

 

US$ million

707

910

265

2,344

1%

10.

Uttar Pradesh

INR crore

1,619

3,373

2,762

12,615

 

US$ million

217

420

334

1,635

1%

(i.) FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar applied, on the basis of monthly average rate provided by RBI (DEAP), Mumbai.

(ii.) Percentage worked out in US$ terms & FDI inflow received through Government Route + Automatic Route + acquisition of existing shares only.

(iii.) State-wise data is maintained w.e.f. October 2019. Figures are provisional.

 

Source: DPIIT

Sector-wise FDI trends in India

FY24 saw a varied performance across different sectors in terms of FDI distribution. While FDI inflows in the computer software and hardware sector remained the highest at US$7.9 billion, followed by the services sector at US$6.6 billion, both sectors experienced a year-on-year decline.

In contrast, the construction sector witnessed a near threefold increase in FDI inflows, showcasing its growing attractiveness to foreign investors as infrastructure projects across the country have been greenlit.

On the flip side, traditional sectors such as drugs and pharmaceuticals, chemicals, automotive, and telecom faced significant declines in FDI, with reductions of 48 percent, 54 percent, 20 percent, and 60 percent year-on-year, respectively. This shift highlights the changing priorities and challenges within India’s investment landscape.

READ MORE: Understanding India’s Manufacturing Landscape

Sectors in India Attracting the Highest FDI Equity Inflow

Rank

Sector

Amount in INR crore / US$ million

2021-22

(April-March)

2022-23

(April-March)

2023-24

(April-March)

Cumulative equity inflow

(April 2000 – March 2024)

Percentage out of total FDI equity inflow (in US$ terms)

1.

Services sector

INR crore

53,165

69,852

54,894

6,86,879

 

US$ million

7,131

8,707

6,640

109,496

16%

2.

Computer software and hardware

INR crore

1,07,762

74,718

66,090

7,18,869

 

US$ million

14,461

9,394

7,973

102,884

15%

3.

Trading

INR crore

33,779

38,060

32,080

2,99,259

 

US$ million

4,538

4,792

3,865

43,396

6%

4.

Telecommunications

INR crore

4,980

5,469

2,318

2,34,840

 

US$ million

668

713

282

39,326

6%

5.

Automobile industry

INR crore

51,624

15,184

12,622

2,35,287

 

US$ million

6,994

1,902

1,524

36,268

5%

6.

Construction (Infrastructure activities)

INR crore

24,178

13,588

35,076

2,39,554

 

US$ million

3,248

1,703

4,232

33,918

5%

7.

Construction development

INR crore

932

1,196

2,113

1,31,321

 

US$ million

125

146

255

26,611

4%

8.

Drugs and pharmaceuticals

INR crore

10,552

16,654

8,844

1,34,881

 

US$ million

1,414

2,058

1,064

22,528

3%

9.

Chemicals (other than fertilizers)

INR crore

7,202

14,662

6,985

1,33,704

 

US$ million

966

1,850

844

22,146

3%

10.

Power

INR crore

3,904

5,483

14,141

1,08,997

 

US$ million

526

698

1,701

18,287

3%

(i) ** Services sector includes financial, banking, insurance, non-financial / business, outsourcing, R&D, courier, technology testing and analysis, other.

(ii) FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar applied, on the basis of monthly average rate provided by the Reserve Bank of India (RBI) (DEAP), Mumbai.

(iii) Percentage worked out in US$ terms & FDI inflow received through Government Route + Automatic Route + acquisition of existing shares only.

(iv) FDI sectoral data has been revalidated / reconciled in line with the RBI, which may reflect minor changes in the FDI figures (increase/decrease) as compared to the earlier published sectoral data.

(v) Figures are provisional.

Source: DPIIT

Key contributors to FDI inflows into India

When tracking for cumulative FDI inflows into India from fiscal years 2000 to 2024, Mauritius, Singapore, USA, Netherlands, and Japan remain the top five contributors. In FY24, Singapore emerged as the largest contributor, accounting for US$11.7 billion of the total FDI inflows.

Share of Top Investing Countries FDI Equity Inflow

Rank

Country

Amount in INR crore and US$ million

2021-22

(April – March)

2022-23

(April – March)

2023-24

(April – March)

Cumulative

equity

inflow *

(April

2000 –

March

2024)

Percentage of total FDI equity inflow (in US$ terms)

1.

Mauritius

INR crore

69,945

48,895

66,147

10,22,589

 

US$ million

9,392

6,134

7,970

171,847

25%

2.

Singapore

INR crore

1,18,235

1,37,374

97,475

10,91,873

 

 

US$ million

15,878

17,203

11,774

159,943

24%

3.

USA

INR crore

78,527

48,666

41,403

4,47,317

 

 

US$ million

10,549

6,044

4,998

65,194

10%

4.

Netherlands

INR crore

34,442

19,855

40,733

3,24,182

 

 

US$ million

4,620

2,498

4,924

48,683

7%

5.

Japan

INR crore

11,187

14,328

26,243

2,62,304

 

 

US$ million

1,494

1,798

3,177

41,918

6%

6.

United Kingdom

INR crore

12,283

13,994

10,061

2,03,296

 

 

US$ million

1,657

1,738

1,216

35,091

5%

7.

UAE

INR crore

7,699

26,315

24,262

1,31,220

 

 

US$ million

1,032

3,353

2,924

18,502

3%

8.

Cayman Islands

INR crore

28,383

6,069

2,835

1,07,914

 

 

US$ million

3,818

772

342

15,266

2%

9.

Germany

INR crore

5,421

4,417

4,181

87,874

 

 

US$ million

728

547

505

14,643

2%

10.

Cyprus

INR crore

1,735

10,184

6,705

79,456

 

 

US$ million

233

1,277

806

13,450

2%

Total FDI equity inflow from all countries

INR crore

4,37,188

3,67,435

3,67,899

43,47,001

 

US$ million

58,773

46,034

44,423

678,864

 

Notes:

  • *Includes inflow under NRI schemes of the RBI.
  • FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar applied, on the basis of monthly average rate provided by RBI (DEAP), Mumbai.
  • Percentage worked out in US dollar terms & FDI inflow received through Government Route + Automatic Route + Acquisition of existing shares only.
  • Figures are provisional

Source: DPIIT

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