Strong macroeconomic fundamentals, big-ticket investment announcements, persistent attempts to improve the ease of doing business, and a new generation of investment-linked trade agreements are all projected to contribute to the healthy expansion of FDI inflows into India in 2026.
Government review of Foreign Direct Investment policy
The government periodically examines the Foreign Direct Investment (FDI) policy after conducting thorough stakeholder discussions in order to guarantee that India continues to be an appealing and investor-friendly location.
This year, the Department for Promotion of Industry and Internal Trade (DPIIT) has met with several stakeholders to discuss methods to encourage foreign direct investment. Piyush Goyal, the minister of commerce and industry, also conducted meetings in November on how to increase investment by streamlining, expediting, and improving processes.
Why foreign investors remain focused on India
Important factors that are keeping foreign investors focused on India despite global challenges include investor-friendly policies and regulatory practices, a strong return on investment, a skilled workforce, easing compliance burdens, decriminalizing minor industry-related offenses, and streamlined approvals.
Amidst worldwide concerns, total foreign direct investments (FDI) exceeded $80.5 billion in 2024–2025. Between January and October of 2025, gross foreign investments exceeded $60 billion.
FDI inflows hit record levels
According to DPIIT Secretary Amardeep Singh Bhatia, a number of government initiatives have drawn notable investments to India over the past eleven years.
In 2024–2025, it reached an all-time high of $80.62 billion. We hope that FDI this year (2026) would surpass the $80.62 billion statistics from the previous year,” he told PTI.
Role of free trade agreements
Additionally, India is relying on its free trade deal with the European Free Trade Association (EFTA), which has pledged to provide $100 billion in foreign direct investment to the nation over a 15-year period.
On October 1, 2025, the agreement went into effect, and Swiss healthcare giant Roche Pharma declared that it would invest 1.5 billion Swiss francs, or roughly Rs 17,000 crore, in India over the following five years.
The sovereign wealth funds of the EFTA countries—Switzerland, Norway, Iceland, and Liechtenstein—will not make any foreign institutional or portfolio investments; instead, this will be pure FDI.
Global investment outlook
Global FDI flows decreased by 11% to $1.5 trillion in 2024, according to UNCTAD’s World Investment Report 2025. While flows to emerging economies were steady, developed countries saw a 22% decline.
According to the research, investors continued to maintain high project activity in Asia, especially in east and southeast Asia and India.
Major corporate investment announcements
This year, several large multinational corporations have announced significant investments. Microsoft CEO Satya Nadella has promised an investment of $17.5 billion by 2030. Amazon intends to invest $35 billion in India, while Google plans to establish an AI hub in India with a $15 billion investment over the next five years.
Both Samsung and Apple are growing their manufacturing operations in India, while Arcelormittal Nippon Steel India plans to expand its capacity for color-coated steel by 2026.
Economic growth and reforms
The Indian economy expanded by 8.2% in the second quarter of 2025–2026, according to the National Statistical Office (NSO). The government has released the second version of the Jan Viswas law, which decriminalizes small industry-related offenses.
Expert views on FDI outlook
“These improvements are projected to channel greater long-term FDI into services, software, and electronics,” stated Rumki Majumdar, an economist at Deloitte India.
According to Rudra Kumar Pandey, Partner at Shardul Amarchand Mangaldas & Co., FDI from the Gulf Cooperation Council (GCC) nations has become a key pillar of India’s foreign investment landscape.
Top investing countries and sectors
The United States, the Netherlands, Japan, and the United Kingdom are the largest investors in India, with Mauritius and Singapore accounting for roughly 49% of the total.
The services sector, computer software and hardware, telecommunications, trading, construction development, automobiles, chemicals, and pharmaceuticals have drawn the most foreign direct investment in India.
FDI is crucial since India’s infrastructure sector would need significant investments in the upcoming years to spur growth. The rupee’s value and the balance of payments are both maintained by strong foreign inflows.
