NEW DELHI: India has recorded a cumulative gross foreign direct investment (FDI) inflow of $1 trillion since April 2000. This achievement highlights the country’s growing appeal as a global investment destination, driven by policy reforms, a robust business environment, and its increasing global competitiveness.
The first half of FY 2024-25 alone witnessed a 26% rise in FDI inflows, amounting to $42.1 billion, showcasing a strong rebound and investor confidence. The transformative role of FDI in India’s development is evident through significant technology transfers, job creation, and bolstering non-debt financial resources.
India’s remarkable progress in attracting foreign direct investment can be attributed to several key factors. The nation has made significant strides in enhancing its competitiveness and innovation ecosystem, as evidenced by its improved ranking in the World Competitive Index 2024, where it rose to 40th place, and in the Global Innovation Index 2023, where it secured the 48th spot. These advancements highlight India’s growing focus on fostering innovation and maintaining a competitive edge on the global stage.
India’s global standing in investments has also been noteworthy. The country ranked third worldwide for greenfield projects and secured the second position in international project finance deals, underscoring its increasing prominence as a preferred destination for large-scale investments.
The business environment in India has seen a marked improvement due to sustained reforms aimed at simplifying bureaucratic processes and regulations. This is reflected in the country’s significant leap in the World Bank’s Doing Business Report rankings, moving from 142nd position in 2014 to 63rd in 2019.
Aditionally, policy reforms have played a pivotal role in attracting FDI. The government’s investor-friendly measures, including liberalizing FDI in key sectors and amending the Income Tax Act to abolish the angel tax, have bolstered foreign investments and reinforced India’s image as a welcoming and growth-oriented market.
With the successful implementation of initiatives like “Make in India” and the liberalization of sectoral policies, India is poised to sustain its growth momentum. Strategic measures, including greater FDI in space and technology sectors, reflect a forward-looking approach to align with global economic trends.