Foreign direct investment inflows into India surged sharply in 2025, rising by 73 per cent to reach $47 billion, according to a latest assessment by the United Nations Conference on Trade and Development (UNCTAD). The strong growth places India among the world’s top-performing destinations for foreign investment during the year.
UNCTAD attributed the rise primarily to large-scale investments in the services sector, particularly finance, information technology, and research and development, along with renewed momentum in manufacturing. Policy measures aimed at integrating India more deeply into global supply chains also played a significant role in boosting investor confidence.
Investment activity in data centres emerged as a major driver of foreign inflows. During the first three quarters of the year, India attracted $7 billion in data centre investments, placing it seventh globally among recipient countries. The momentum accelerated further in the final quarter, making the sector one of the most dynamic areas of foreign investment.
Several global technology majors announced substantial commitments. Google unveiled plans to invest $15 billion in artificial intelligence hubs in Andhra Pradesh. Microsoft announced $17.5 billion in investments focused on AI, cloud infrastructure, and data centres, while Amazon committed $35 billion across AI and related technology sectors. These investments are expected to be deployed over multiple years.
At the global level, foreign direct investment rose by 14 per cent to $1.6 trillion, supported largely by developed economies where inflows increased by 43 per cent to $728 billion. UNCTAD noted that data centres accounted for nearly one-fifth of global greenfield project values, reflecting rising demand for digital infrastructure and cloud-based services.
Semiconductors also recorded strong growth, with the value of newly announced projects rising by 35 per cent. In contrast, sectors exposed to higher geopolitical and supply chain risks saw a notable decline. Investment project numbers fell sharply in textiles, electronics, and machinery.
Despite India’s strong performance, overall FDI into developing economies declined by 2 per cent to an estimated $877 billion, underscoring India’s position as a notable outlier. China continued to see a downturn in foreign investment for the third consecutive year, with inflows falling to an estimated $107.5 billion, largely concentrated in strategic and high-growth sectors.
UNCTAD cautioned that headline growth figures may overstate the strength of the global investment recovery. International mergers and acquisitions declined by 10 per cent, while project finance fell for the fourth consecutive year. Greenfield project announcements also dropped by 16 per cent, highlighting persistent weakness in real investment activity.
The report emphasised that policymakers should prioritise reviving long-term productive investment rather than relying solely on financial flows, noting that investor sentiment remains fragile despite isolated pockets of strong growth.
