To ensure that India remains an attractive and investor-friendly destination, the government continuously reviews FDI policies and makes changes from time to time after extensive consultation with stakeholders.
The Department for Promotion of Industry and Internal Trade (DPIIT) has held a series of meetings with stakeholders this year on ways to promote foreign direct investment. In November, Commerce and Industry Minister Piyush Goyal also held consultations on ways to attract greater investments by making processes faster, smoother and more efficient.
Investor-friendly policies and regulations, strong returns on investment, a talented workforce, easing of compliance burden, decriminalization of minor sector-related offenses and streamlined approvals are key measures that will ensure foreign investors continue to focus on India despite global challenges.
In 2024-2025, total foreign direct investment (FDI) will cross the $80.5 billion mark amid global uncertainties. Gross foreign investment during January-October 2025 has exceeded $60 billion.
DPIIT Secretary Amardeep Singh Bhatia said that India has attracted remarkable investments in the last eleven years due to a series of measures taken by the government.
“It has reached a record high of $80.62 billion in 2024-25. We hope that this year (2026) FDI will cross last year’s figures of $80.62 billion,” he told PTI.
India is also banking on its free trade agreement with the four-nation European Free Trade Association (EFTA), under which the bloc has committed to investing $100 billion in foreign direct investment in the country over 15 years.
The pact came into effect on October 1, 2025, and on the day of its implementation, Swiss healthcare giant Roche Pharma announced a commitment to invest 1.5 billion Swiss francs (approximately ₹17,000 crore) in India over the next five years.
These will be pure foreign direct investments and not foreign institutional or portfolio investments by sovereign wealth funds of the EFTA countries – Switzerland, Norway, Iceland and Liechtenstein.
New Zealand has made a similar commitment of $20 billion under its trade deal with India, which is expected to be implemented in 2026.
Certain reports also predict a positive outlook for foreign direct investment in India.
According to UNCTAD’s World Investment Report 2025, global FDI flows fell by 11 percent to $1.5 trillion in 2024. However, this figure masks major differences in performance between economies.
Developed countries experienced a contraction of 22 percent, while flows to developing economies remained stable. In Asia, especially in East and Southeast Asia, and in India, investors continued to have strong project activity, the report said.
Some of the major global companies have announced major investments this year.
Microsoft CEO Satya Nadella has announced an investment of $17.5 billion by 2030 to help build infrastructure and sovereign capabilities for the country’s AI-first future.
Amazon plans to invest $35 billion in India over the next five years to expand its business from high-speed commerce to cloud computing and artificial intelligence. Google will invest $15 billion over the next five years to set up an AI hub in India.
iPhone maker Apple is expanding its presence in India, and South Korean electronics giant Samsung is also expanding its manufacturing portfolio in the country.
Arcelormittal Nippon Steel India aims to increase its color coated steel capacity from the current 7 lakh tonnes to 10 lakh tonnes per annum by 2026.
According to the National Statistical Office (NSO), the Indian economy grew by 8.2 percent in the second quarter of 2025-26. The government, for its part, has released the second edition of the Jan Viswas Bill to promote ease of doing business by decriminalizing minor sector-related offences.
Experts have also stated that India’s strong economic fundamentals and resilience, along with a sustained reform drive, will be a key reason for a revival in foreign direct investment in 2026.
“As India diversifies its economic relationships amid geopolitical uncertainties and moves up the manufacturing and services value chain, these developments are expected to channel greater foreign direct investment into services, software and electronics in the long term,” said Rumki Majumdar, economist at Deloitte India.
Rudra Kumar Pandey, partner at Shardul Amarchand Mangaldas & Co, said FDI from Gulf Cooperation Council (GCC) countries has emerged as a strategic and increasingly sustainable pillar of India’s foreign investment landscape.
“Technology-driven services are expected to remain the main magnet for foreign capital, with an increasing emphasis on artificial intelligence, data analytics, cloud infrastructure and Global Capability Centers focused on AI deployment and applied research,” he added.
The top investors in India include Mauritius and Singapore (together accounting for about 49 percent), followed by the US (10 percent), the Netherlands (7.2 percent), Japan (6 percent) and the United Kingdom (5 percent).
The key sectors that have attracted the maximum FDI in India include services segment, computer software and hardware, telecommunication, trade, construction development, automotive, chemicals and pharmaceuticals.
In most sectors, foreign direct investments are allowed through the automatic route, while in areas such as telecom, media, pharmaceuticals and insurance, government approval is required for foreign investors.
Currently, foreign direct investments are prohibited in certain sectors. They are lotteries, gambling and betting, money funds, nidhi companies, real estate companies and production of cigars, cheroots, cigarillos and cigarettes with the help of tobacco.
Foreign direct investment is important as India needs huge investments in the coming years for its infrastructure sector to drive growth. Healthy foreign inflows also help maintain the balance of payments and the value of the rupee.
Published on December 27, 2025
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