India’s foreign direct investment (FDI) inflows rebounded strongly in Q1 FY 2025-26, rising 15 percent year-on-year to US$18.62 billion after a sharp dip in Q4 of FY 2024-25. The surge, led by US investors and concentrated in technology-driven sectors, reflects India’s growing appeal as a resilient economy and reform-oriented investment destination.
India witnessed a 15 percent rise in FDI during Q1 FY 2025-26 (April–June), with inflows reaching US$18.62 billion, compared to US$16.17 billion in the same period of FY 2024-25. This comes after a sharp 24.5 percent year-on-year decline in Q4 FY25, when inflows had dropped to US$9.34 billion.
Including reinvested earnings and other capital components, the total FDI rose to US$25.2 billion in Q1 FY 2025-26, up from US$22.5 billion in Q1 FY 2024-25.
Top FDI sources for India in 2025
The United States (US) emerged as one of the top investors, contributing US$5.61 billion in Q1 FY26, almost triple its inflows of US$1.50 billion during the same period the previous fiscal and despite ongoing tariff-related challenges. Singapore followed with US$4.59 billion, and Mauritius with US$2.08 billion.
In terms of cumulative investment since April 2000, the US ranks third with US$76.26 billion, after Mauritius (US$182.2 billion) and Singapore (US$179.48 billion).
|
Share of Top Investing Countries’ FDI Equity Inflow (Value in US$ Million) |
|||||
|
Rank |
Country |
FY 2024-25 (April 2024 – March 2025) |
Q1 FY 2025-26 (April-June) |
Cumulative equity inflow *(April 2000-June 2025) |
Percentage out of total FDI equity inflow |
|
1 |
Mauritius |
8,344 |
2,081 |
182,272 |
24% |
|
2 |
Singapore |
14,942 |
4,599 |
179,484 |
24% |
|
3 |
US |
5,457 |
5,610 |
76,261 |
10% |
|
4 |
The Netherlands |
4,620 |
667 |
53,970 |
7% |
|
5 |
Japan |
2,478 |
551 |
44,947 |
6% |
|
6 |
UK |
795 |
243 |
36,130 |
5% |
|
7 |
UAE |
4,345 |
1,007 |
23,855 |
3% |
|
8 |
Cayman Islands |
371 |
676 |
16,313 |
2% |
|
9 |
Cyprus |
1,203 |
1,108 |
15,761 |
2% |
|
10 |
Germany |
469 |
191 |
15,303 |
2% |
Source: FDI fact sheet, DPIIT
In terms of sectoral performance, major sectors attracting FDI during Q1 FY 2025-26 included computer software and hardware (US$5.4 billion), services (US$3.28 billion), and automobiles (US$1.29 billion).
|
Sectors Attracting Highest FDI Equity Inflow (Value in US$ Million) |
|||||
|
Rank |
Sector |
FY 2024-25 (April 2024 -March 2025) |
Q1 FY 2025-26 (April-June) |
Cumulative equity inflow *(April 2000-June 2025) |
Percentage out of total FDI equity inflow |
|
1 |
Services sector** |
9,347 |
3,281 |
122,124 |
16% |
|
2 |
Computer software and hardware |
7,814 |
5,460 |
116,158 |
16% |
|
3 |
Trading |
4,176 |
506 |
48,077 |
6% |
|
4 |
Telecommunications |
746 |
24 |
40,096 |
5% |
|
5 |
Automobile industry |
1,586 |
1,293 |
39,148 |
5% |
|
6 |
Construction (infrastructure) activities |
2,245 |
688 |
36,850 |
5% |
|
7 |
Construction development: Townships, housing, built-up infrastructure |
529 |
75 |
27,214 |
4% |
|
8 |
Drugs and pharmaceuticals |
891 |
1,197 |
24,617 |
3% |
|
9 |
Chemicals (other than fertilizers) |
1,060 |
140 |
23,347 |
3% |
|
10 |
Non-conventional energy |
4,012 |
1,148 |
23,048 |
3% |
** Services sector includes financial, banking, insurance, non-financial/business, outsourcing, research and development (R&D), courier, technology testing and analysis, and other.
For state-wise FDI inflow into the country, Karnataka led the inflows in Q1 FY26 with US$5.69 billion, followed closely by Maharashtra (US$5.36 billion) and Tamil Nadu (US$2.67 billion). Other key recipients were Gujarat (US$1.2 billion), Haryana (US$1.03 billion), Delhi (US$1 billion), and Telangana (US$395 million).
|
States Attracting Highest FDI Equity Inflow (Value in US$ Million) |
|||||
|
Rank |
States / Union Territory |
FY 2024-25 (April 2024 -March 2025) |
FY 2025-26 (April-June) |
Cumulative equity inflow *(April 2000-June 2025) |
Percentage out of total FDI equity inflow |
|
1 |
Maharashtra |
19,589 |
5,364 |
94,040 |
31% |
|
2 |
Karnataka |
6,619 |
5,696 |
63,346 |
21% |
|
3 |
Gujarat |
5,711 |
1,200 |
46,112 |
15% |
|
4 |
Delhi |
6,091 |
1,099 |
38,907 |
13% |
|
5 |
Tamil Nadu |
3,681 |
2,678 |
17,298 |
6% |
|
6 |
Haryana |
3,147 |
1,030 |
13,907 |
5% |
|
7 |
Telangana |
2,994 |
395 |
11,163 |
4% |
|
8 |
Rajasthan |
374 |
549 |
3,267 |
1% |
|
9 |
Jharkhand |
7 |
3 |
2,677 |
1% |
|
10 |
Uttar Pradesh |
436 |
80 |
2,151 |
1% |
India’s FDI policy landscape
India continues to pursue an investor-friendly FDI policy, with most sectors allowing 100 percent foreign investment under the automatic route. Over the years, India has progressively liberalized FDI norms:
- 2014–2019: Raised investment caps in defense, insurance, and pensions; eased rules in construction, aviation, and single-brand retail.
- 2019–2024: Permitted 100 percent FDI in coal mining, contract manufacturing, and insurance intermediaries.
- 2025 Union Budget: Proposed raising the FDI cap from 74 percent to 100 percent for insurance companies that reinvest their entire premium domestically.
