$135 Billion FDI Commitment in 2025:Strategic steps need to be taken at multiple levels to further increase FDI
During April–September, FDI inflows rose by 16% to USD 50.4 billion, including equity and reinvested earnings, raising hopes that total inflows in the current financial year will cross the USD 100-billion mark for the first time.
NewsBharati 16-Dec-2025 16:30:42 PM
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2025 is turning out to be a year of major Foreign Direct Investment (FDI)
The year 2025 is turning out to be a year of major Foreign Direct Investment (FDI) announcements. Foreign companies ranging from technology giants to chip manufacturers, automobile companies, financial services institutions and energy sector players have, till now in 2025, prepared to invest at least USD 135 billion in India (billion = 10⁹). Some of this investment has already begun, and investments in segments such as Global Capability Centres will be completed in the coming months; however, if it takes a period of five years for this investment to fully materialise, it will translate into an additional annual FDI inflow of USD 27 billion—roughly one-third of last year’s total gross inflow of USD 81 billion.
During April–September, FDI inflows rose by 16% to USD 50.4 billion, including equity and reinvested earnings, raising hopes that total inflows in the current financial year will cross the USD 100-billion mark for the first time. Recent large investment announcements by tech giants Google, Microsoft and Amazon have further boosted this optimism, taking their combined investment commitment to more than USD 70 billion. In addition, there are another 750–800 investment proposals from companies such as Foxconn, VinFast and Shell Energy, with a combined investment of over USD 65 billion.
Global investors see major opportunities in the Indian market
“This does not include the significant interest of private equity and venture capital players in Indian start-ups. Global investors see major opportunities in the Indian market, not only to meet domestic consumption demand, but also to use India as a base for other markets and to tap into its large talent pool of engineers, finance professionals and other specialists.”
After the large outflows by foreign companies and investors, which had put pressure on the government, these investment inflows are a positive sign for the authorities. Some of these investors had sold part of their holdings once their Indian ventures were listed. In addition, many Indian companies are investing in other markets to become part of the global supply chain. As a result, there has been pressure on net FDI, which is estimated at USD 7.6 billion in April–September this year, compared to USD 3.4 billion in the same period last year. For the full financial year 2024–25, net FDI was less than USD 1 billion, as repatriation of profits and disinvestment by foreign companies rose to around USD 50 billion last year.
“Strong FDI inflows will definitely help reverse this trend. There is a need for higher overall FDI inflows, and that is where the government’s focus lies.”
Attracting investment into the Electric Vehicle (EV) sector
Against the backdrop of record-breaking foreign portfolio outflows and a weakening rupee, FDI will support market sentiment, particularly because it is considered more stable and durable. These trends show that a large share of investment is flowing into the tech sector, with growing interest in new areas such as semiconductors. However, there are sectors like automobiles where several major global companies such as Ford and GM have decided to exit. The government is now trying to attract investment into the Electric Vehicle (EV) sector and hopes that, after VinFast, companies like Tesla will also set up factories in the country.
At the same time, many Chinese companies – especially Chinese electric vehicle manufacturers – are keen to invest in India, but the government has kept them somewhat at arm’s length, because China is considered a highly cunning state and there is a constant fear that such companies may engage in other dubious activities while operating in India.
Increasing FDI Flow In India
Going forward, India will have to take strategic and targeted steps at multiple levels to further increase FDI inflows from abroad. Some key recommendations are given below:
Priority partner countries (Target Countries)
India should deepen ties with existing key partners while also focusing on new and emerging markets.
Traditional partners – USA, Japan, Singapore, UK, Netherlands:
These countries are already major investors. Engagement should focus on greater partnerships in technology, digital infrastructure and financial services.
Technology and manufacturing – South Korea, Germany, Taiwan:
To attract investment in manufacturing, semiconductors (chips), automobiles and advanced engineering.
Energy and infrastructure – United Arab Emirates (UAE), Saudi Arabia, France, Australia:
To attract large capital investments in energy transition, renewable energy, ports, roads and logistics.
ASEAN countries – Vietnam, Indonesia, Thailand:
To promote supply-chain diversification and develop India as a production hub for intra-Asian trade.
Target companies and sectors
India should not limit outreach to the government level, but directly engage at the corporate level to attract companies aligned with the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives.
Semiconductors and electronics – TSMC, Samsung Electronics, Intel, Micron, Foxconn:
To bring the entire value chain to India and set up design and manufacturing hubs.
Electric vehicles (EVs) and automobiles – Tesla, BYD, BMW, Hyundai, VinFast:
To invest in EV manufacturing, battery technology and EV charging infrastructure.
Green energy and hydrogen – TotalEnergies, Shell Energy, Adani Green/Reliance (partnerships):
To develop large-scale solar and wind projects and green-hydrogen production units.
Data centres and cloud services – Amazon Web Services (AWS), Google Cloud, Microsoft Azure, Oracle:
- To invest in data centres in line with growing data-localisation requirements.
- Life sciences and pharma – Pfizer, Roche, Johnson & Johnson:
- To invest in research and development (R&D), clinical trials and high-value pharmaceutical manufacturing.
- Strategic reforms and policy steps
- To attract FDI, policy must ensure continuity, ease and competitiveness.
A. Ease of doing business and regulatory reforms
Single-window clearance: Make it mandatory that all approvals for FDI projects at the central and state level be processed fully digitally and within strict timelines.
Contract enforcement: Strengthen dedicated commercial courts to ensure faster and more reliable resolution of business disputes.
Tax stability: Avoid frequent changes in tax laws and provide a clear long-term tax-stability framework.
B. Infrastructure and land reforms
Expansion of the Gati Shakti programme: Accelerate work on world-class logistics, ports, airports and connectivity to reduce production costs.
Industrial land bank: Provide investors with readily available, dispute-free land with necessary infrastructure.
Investment-specific SEZs: Develop customised Special Economic Zones for specific sectors (for example, semiconductors, medical devices) tailored to their FDI requirements.
C. Talent pool and skilling
Skilled workforce: Launch high-end skill-development programmes in engineering, technology and manufacturing aligned with industry demand.
International academic collaboration: Encourage global universities to set up campuses in India to improve R&D and the quality of the talent pool.
D. Investment incentives
Expansion of the Production-Linked Incentive (PLI) scheme: Extend PLI benefits to new high-tech sectors such as space-tech, AI and robotics to attract companies from Europe and the US.
Liberalisation of FDI policy: Raise FDI limits under the automatic route in sectors like insurance, media and e-commerce where restrictions still exist.
Through this combination of measures, India will not remain merely an attractive consumption market, but will emerge as a reliable and competitive global manufacturing and export hub within global supply chains.
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BRIG Hemant Mahajan
Passionate writer on National Security related issues, Brig Hemant Mahajan YSM (Retd) is M Sc, M Phil in Defence Studies. He joined IMA Dehradun in July 1973 and passed out as a Commissioned Officer on 15 June 1975. He was commissioned into 7 MARATHA LIGHT INFANTRY. He has served extensively in Counter Insurgency Operations in Insurgency and Terrorist prone areas of Jammu & Kashmir, Punjab and North East and has taken part in all important operations undertaken by the Army since 1975.
Brig Hemant Mahajan served in Jammu & Kashmir, in the deserts of Rajasthan, in Super High Altitude areas of Kargil and Leh, forward areas of Arunachal Pradesh. He was deployed in Punjab in ‘Operation Avert’. He was also involved in maintaining peace post ‘Operation Bluestar’ days in Punjab in the worst affected district of Gurdaspur, Taran Taran and Amritsar.He served in the areas of Darjeeling, Kurseong, Siliguri and Sikkim. He commanded his battalion 7 MARATHA LIGHT INFANTRY in Operation Rakshak in the most difficult areas of Poonch and Rajouri during the times of highest militancy. His unit was responsible for stopping terrorists from Pakistan into Jammu and Kashmir. His unit was awarded Unit Citation, 18 gallantry awards including YSM (gallantry) for the officer.