FDI in India 2026: Market Size, Developments, Government Initiatives
India received a record USD 94.5 billion of foreign direct investment in FY2025-26, 17% more than the year before; equity inflows rose 18% to USD 58.8 billion. Singapore and the United States sent the most, software and hardware drew the most, and Maharashtra and Karnataka received the most. Two 2026 changes, 100% FDI in insurance and a softer Press Note 3, set the rules ahead.
Key takeaways
- Total FDI inflow was USD 94,527 million in FY2025-26, up 17% from USD 80,615 million in FY2024-25.[1]
- FDI equity inflow was ₹5,16,936 crore (USD 58,846 million) in FY2025-26; cumulative equity since April 2000 crossed USD 787 billion.[1]
- Equity from the United States more than doubled to USD 11,171 million; Singapore stayed first at USD 19,802 million.[1]
- Net FDI after repatriation and outward investment was only USD 7.7 billion, against USD 1 billion in FY2024-25, by RBI's count.[2]
- Since 2 May 2026 insurers may be 100% foreign-owned under the automatic route; indirect land-border holdings under 10%, with no control, no longer need approval.[3][4][5]
How big India's FDI market is in 2026
The Department for Promotion of Industry and Internal Trade (DPIIT) counts FDI in two ways. The wider measure adds equity, re-invested earnings and "other capital", and it reached USD 94,527 million in FY2025-26 (April 2025 to March 2026).[1] DPIIT released the full-year numbers on 3 June 2026.[6]
The narrower measure, FDI equity inflow, was USD 58,846 million, or ₹5,16,936 crore. In rupee terms that was 23% higher than FY2024-25; in dollar terms, 18% higher.[1]
The jump matters because FY2024-25 had already recovered. Equity inflow that year was USD 50,018 million, 13% above FY2023-24, and total FDI was USD 80,615 million.[1] The provisional number announced in May 2025 was USD 81.04 billion, and the Commerce Ministry pointed to services FDI rising 40.77% to USD 9.35 billion and manufacturing FDI rising 18% to USD 19.04 billion.[7]
Since April 2000 India has taken in USD 1,166,462 million of total FDI, of which USD 787,728 million (₹52,85,866 crore) was equity.[1] Invest India, the government's investment promotion agency, puts the eleven years from FY2014 to FY2025 at USD 748.78 billion, and says the number of source countries rose from 89 in FY2013-14 to 112 in FY2024-25.[8]
| Component (USD million) | FY2023-24 | FY2024-25 | FY2025-26 (P) |
|---|---|---|---|
| Equity (government, automatic and acquisition routes) | 44,423 | 50,018 | 58,846 |
| Equity capital of unincorporated bodies | 1,394 | 975 | 3,436 |
| Re-invested earnings | 19,768 | 22,759 | 25,563 |
| Other capital | 5,716 | 6,863 | 6,681 |
| Total FDI inflow | 71,302 | 80,615 | 94,527 |
| Growth over previous year | 0% | +13% | +17% |
One caveat on the total. DPIIT notes that re-invested earnings and other capital are estimated as the average of the previous two years, so the USD 94.5 billion headline will move when RBI finalises the data.[1] The equity figure is the firmer one.
Gross inflow versus net FDI
Gross inflow is not money that stays. RBI's annual report, released on 29 May 2026, put gross inward FDI at USD 94.5 billion for FY2025-26. Repatriation and disinvestment by foreign investors took USD 53.6 billion out, and outward FDI by Indian companies another USD 33.3 billion. Net FDI therefore came to USD 7.7 billion.[2]
That is better than USD 1 billion in FY2024-25, but below USD 10.2 billion in FY2023-24 and USD 28 billion in FY2022-23.[2] Foreign portfolio investors were net sellers in FY2025-26, with an outflow of USD 15,500 million, after a USD 3,283 million inflow in FY2024-25.[1] For a company owner raising money, the split matters: direct investors kept putting money in while portfolio investors pulled it out.
Where the money came from: countries
Singapore sent USD 19,802 million of equity in FY2025-26, 33% more than in FY2024-25, and it remains the largest cumulative source at 25% of all equity since 2000.[1] The United States was the big mover: USD 11,171 million against USD 5,457 million a year earlier.[1][9] Mauritius, once the top route, fell to USD 6,576 million.[1]
The Cayman Islands rose more than fivefold, from USD 371 million to USD 2,084 million.[1] The United Arab Emirates fell from USD 4,345 million to USD 2,738 million.[1]
| Rank | Country | FY2024-25 (USD mn) | FY2025-26 (USD mn) | April 2000–March 2026 (USD mn) | Share since 2000 |
|---|---|---|---|---|---|
| 1 | Singapore | 14,942 | 19,802 | 194,688 | 25% |
| 2 | Mauritius | 8,344 | 6,576 | 186,767 | 24% |
| 3 | United States | 5,457 | 11,171 | 81,821 | 10% |
| 4 | Netherlands | 4,620 | 3,374 | 56,676 | 7% |
| 5 | Japan | 2,478 | 3,745 | 48,141 | 6% |
| 6 | United Kingdom | 795 | 1,007 | 36,894 | 5% |
| 7 | UAE | 4,345 | 2,738 | 25,586 | 3% |
| 8 | Cayman Islands | 371 | 2,084 | 17,722 | 2% |
| 9 | Cyprus | 1,203 | 1,412 | 16,065 | 2% |
| 10 | Germany | 469 | 495 | 15,607 | 2% |
| All countries | 50,018 | 58,846 | 787,728 | 100% |
Where the money went: sectors
Computer software and hardware took USD 13,946 million of equity in FY2025-26, up from USD 7,814 million, and overtook services as the largest sector for the year.[1] Services, which DPIIT defines to include financial, banking, insurance, outsourcing, R&D and courier businesses, drew USD 10,010 million.[1] Drugs and pharmaceuticals doubled to USD 1,912 million, and the automobile industry rose to USD 2,459 million.[1]
Two sectors slipped. Non-conventional energy fell from USD 4,012 million to USD 3,019 million, and telecommunications dropped from USD 746 million to USD 118 million.[1] Food processing, which does not appear in the full-year top ten, was the fourth-largest sector in the first nine months with USD 2,728 million, or 6% of equity inflow between April and December 2025.[10]
| Rank | Sector | FY2024-25 (USD mn) | FY2025-26 (USD mn) | April 2000–March 2026 (USD mn) |
|---|---|---|---|---|
| 1 | Services | 9,347 | 10,010 | 128,853 |
| 2 | Computer software and hardware | 7,814 | 13,946 | 124,644 |
| 3 | Trading | 4,176 | 4,011 | 51,586 |
| 4 | Automobile industry | 1,586 | 2,459 | 40,314 |
| 5 | Telecommunications | 746 | 118 | 40,190 |
| 6 | Construction (infrastructure) activities | 2,245 | 2,574 | 38,737 |
| 7 | Construction development (townships, housing) | 529 | 414 | 27,553 |
| 8 | Drugs and pharmaceuticals | 891 | 1,912 | 25,331 |
| 9 | Non-conventional energy | 4,012 | 3,019 | 24,918 |
| 10 | Chemicals (other than fertilisers) | 1,061 | 853 | 24,112 |
Where the money landed: states
Maharashtra received USD 18,418 million of equity in FY2025-26, a touch below its USD 19,589 million of FY2024-25, but still 31% of all state-tagged inflow since October 2019.[1] Karnataka nearly doubled to USD 12,939 million, in the year software and hardware inflow rose 78%.[1] Rajasthan and Uttar Pradesh more than doubled from small bases, to USD 1,009 million and USD 950 million.[1]
DPIIT tags inflows to the state of the investee company's registered office, and it has kept state data only since October 2019.[1] A company registered in Mumbai with a plant in Gujarat still counts for Maharashtra.
| Rank | State / UT | FY2024-25 (USD mn) | FY2025-26 (USD mn) | October 2019–March 2026 (USD mn) | Share |
|---|---|---|---|---|---|
| 1 | Maharashtra | 19,589 | 18,418 | 107,094 | 31% |
| 2 | Karnataka | 6,619 | 12,939 | 70,589 | 21% |
| 3 | Gujarat | 5,711 | 5,713 | 50,626 | 15% |
| 4 | Delhi | 6,091 | 6,182 | 43,989 | 13% |
| 5 | Tamil Nadu | 3,681 | 4,724 | 19,343 | 6% |
| 6 | Haryana | 3,147 | 4,526 | 17,403 | 5% |
| 7 | Telangana | 2,994 | 2,253 | 13,021 | 4% |
| 8 | Rajasthan | 374 | 1,009 | 3,727 | 1% |
| 9 | Uttar Pradesh | 436 | 950 | 3,020 | 1% |
| 10 | Jharkhand | 7 | 4 | 2,678 | 1% |
The year month by month, and the first quarter of FY2026-27
Equity inflow in FY2025-26 peaked at USD 8,683 million in July 2025 and bottomed at USD 2,349 million in January 2026.[1] The first quarter (April to June 2025) brought USD 18,628 million of equity, 15% more than the same quarter of 2024. The United States was the top source at USD 5,610 million, and computer software and hardware the top sector at USD 5,460 million.[11] The fourth quarter (January to March 2026) added USD 10,972 million of equity and USD 20,876 million of total FDI.[1]
| Period | FDI equity (₹ crore) | FDI equity (USD mn) |
|---|---|---|
| April–June 2025 (Q1) | 1,59,428 | 18,628 |
| July–September 2025 (Q2) | 1,43,974 | 16,552 |
| October–December 2025 (Q3) | 1,13,306 | 12,695 |
| January–March 2026 (Q4) | 1,00,227 | 10,972 |
| FY2025-26 | 5,16,936 | 58,846 |
The new financial year opened strongly and then cooled. DPIIT data reported on 26 September 2026 show USD 19.81 billion of FDI in April to June 2026, 6% more than the USD 18.62 billion of the same quarter in 2025. April alone brought USD 12.1 billion; June only USD 4.91 billion.[12]
Japan was the largest source for the quarter at USD 5.71 billion, ahead of Singapore at USD 5.22 billion, while United States inflows fell 76% to USD 1.34 billion.[12] Tamil Nadu topped the states for the quarter with USD 5.95 billion.[12]
Policy changes that shape 2026
100% FDI in insurance under the automatic route
DPIIT's Press Note 1 of 2026, dated 9 February 2026, replaced paragraph 5.2.22 of the Consolidated FDI Policy 2020. Insurance companies and insurance intermediaries may now be 100% foreign-owned under the automatic route, which means no prior government approval. Life Insurance Corporation of India stays at 20%, also automatic.[3] The key condition is governance: at least one of the chairperson, managing director or chief executive must be a resident Indian citizen, and IRDAI must verify or approve the investment.[3]
The press note took effect only once matching FEMA rules were notified, which the Finance Ministry did on 2 May 2026.[4] The change follows the Sabka Bima Sabki Raksha (Amendment of Insurance Laws) Act, 2025, which Parliament passed in December 2025 and which took effect for most provisions on 5 February 2026. The previous cap of 74% dated from 2021.[13] Insurance drew about USD 6.5 billion of FDI between December 2014 and January 2024, while the number of licensed insurers rose from 53 to 70.[13]
Press Note 3 relaxed for small land-border holdings
Press Note 3 of 2020 forced every investment from a country sharing a land border with India, or with a beneficial owner there, through the government approval route. Press Note 2 of 2026 narrowed the rule. Where a land-bordering country's residents or citizens hold less than 10% beneficial interest in the investing entity and have no control, the investment may use the automatic route, subject to sectoral caps and reporting.[5] Direct investments from those countries still need approval, whatever their size.[5]
Beneficial ownership is now tested under the anti-money-laundering framework, not the Companies Act test many funds had relied on.[5] Where approval is still needed, the amendment sets a 60-day decision timeline for capital goods, electronic capital goods, electronic components, and polysilicon and ingot wafers. The condition is that resident Indians keep majority ownership and control of the investee.[5]
The Foreign Exchange Management (Non-debt Instruments) Amendment Rules, 2026, notified on 2 May 2026, gave the changes legal effect.[5] For a start-up whose global venture fund has a small Chinese limited partner, the 10% test can now keep the round on the automatic route, provided that partner has no control rights.[5]
Sector caps and entry routes
Most sectors are open to 100% FDI under the automatic route, which means no prior government approval.[8] The table lists the caps that readers ask about most. DPIIT's quarterly fact sheets do not split equity inflow between the two routes; the equity totals above combine the government route, the automatic route and acquisitions of existing shares.[1]
| Sector | Cap | Route | Source |
|---|---|---|---|
| Insurance companies | 100% | Automatic (IRDAI verification; one resident Indian among chair, MD or CEO) | Press Note 1 of 2026[3] |
| Insurance intermediaries (brokers, TPAs, corporate agents) | 100% | Automatic | Press Note 1 of 2026[3] |
| Life Insurance Corporation of India | 20% | Automatic | Press Note 1 of 2026[3] |
| Defence manufacturing | 74% | Automatic | Invest India[14] |
| Telecom services | 100% | Automatic | Invest India[15] |
| Single-brand retail and e-commerce | 100% | Automatic | Invest India[16] |
| Any sector, investor with land-border beneficial owner above 10% or with control | Sectoral cap | Government approval (Press Note 3 of 2020 as amended in 2026) | TT&A note on the 2026 NDI Rules[5] |
Other initiatives behind the numbers
Invest India links the manufacturing inflow to the Production Linked Incentive (PLI) schemes: 892 applications approved and ₹2.4 lakh crore of cumulative investment by March 2026. Mobile phone production reached about USD 75 billion and exports about USD 35 billion in the last financial year.[8] India signed bilateral investment treaties with the UAE (in force August 2024) and Uzbekistan (September 2024), and is negotiating with Saudi Arabia, Qatar, the European Union, Switzerland and Australia.[8]
A worked example: how a large deal shows up in the data
DPIIT's footnotes single out one transaction by name. The acquisition figures for March, August and October 2011 include the transfer of participating interest in oil and gas blocks from Reliance Industries to BP Exploration (Alpha).[1] FY2011-12 equity inflow jumped 64% to USD 35,121 million that year, and the next year fell 36%.[1]
According to The Company Check's records, Reliance Industries Limited (CIN L17110MH1973PLC019786) was incorporated on 8 May 1973 and is listed. It has paid-up capital of ₹13,532.54 crore and 16 directors and key officers on record, and reported revenue of ₹11,04,637 crore for FY2025-26.[17] Before reading a one-year jump as a trend, check the footnotes for a deal of this kind; DPIIT also warns that its figures are provisional and reconciled with RBI later.[1]
| Legal name | Reliance Industries Limited |
|---|---|
| CIN | L17110MH1973PLC019786 |
| Incorporated | 8 May 1973, Mumbai |
| Listing status | Listed |
| Paid-up capital | ₹13,532.54 crore |
| Directors and key officers | 16 |
| Revenue (FY2025-26) | ₹11,04,637 crore |
What to do with these numbers
If you run a company and expect foreign money, check three things before the term sheet. First, the sector cap and route for your activity, because an approval-route sector needs government approval before shares can be issued.[8] Second, the ultimate beneficial owners of every investing entity, since a land-border holding of 10% or more, or any control right, still sends the deal to the approval route.[5] Third, the state of your registered office, which is where DPIIT will count the inflow.[1]
If you are an investor or analyst, treat the USD 94.5 billion as provisional and watch the equity line, which DPIIT reports monthly and RBI reconciles later.[1] Compare it with net FDI from RBI, which was USD 7.7 billion in FY2025-26, to see how much capital actually stayed.[2] For any Indian company that has taken foreign capital, its filings, charges and shareholding history are on The Company Check, where you can see the share issue that followed the inflow.
Companies mentioned
- Reliance Industries – listed conglomerate in oil, retail and telecom, Mumbai, incorporated 1973
- Life Insurance Corporation of India – state-owned life insurer, Mumbai, founded 1956
Frequently asked questions
How much FDI did India receive in FY2025-26?
DPIIT reports total FDI inflow of USD 94,527 million for April 2025 to March 2026, 17% more than FY2024-25. FDI equity inflow was USD 58,846 million, or ₹5,16,936 crore, up 18% in dollar terms. The total is provisional because re-invested earnings and other capital are estimated.[1]
Which country invests the most in India?
Singapore sent USD 19,802 million of equity in FY2025-26 and holds 25% of cumulative equity since April 2000. The United States was second for the year at USD 11,171 million, more than double its FY2024-25 figure. Mauritius remains second cumulatively at USD 186,767 million.[1]
Which sector attracts the most FDI?
Computer software and hardware led FY2025-26 with USD 13,946 million of equity. Services, which includes financial, banking and insurance businesses, was next at USD 10,010 million and remains first cumulatively at USD 128,853 million.[1]
What is the difference between the automatic route and the government route?
Under the automatic route no prior government approval is needed; under the government route, approval must come before the investment. Most sectors allow 100% FDI under the automatic route.[8] Investments with land-border beneficial ownership of 10% or more, or with control, still need government approval.[5]
Is net FDI the same as the headline figure?
No. RBI counts gross inward FDI of USD 94.5 billion in FY2025-26, then subtracts repatriation and disinvestment of USD 53.6 billion and outward FDI of USD 33.3 billion, leaving net FDI of USD 7.7 billion.[2]
References
- Department for Promotion of Industry and Internal Trade (DPIIT). "Quarterly Fact Sheet on Foreign Direct Investment (FDI) inflow from April 2000 to March 2026". 3 June 2026. Retrieved 5 October 2026.
- Outlook Business (PTI). "Net FDI rebounds to $7.7B in FY26 from $1B in FY25, but below FY24's $10.2B and FY23's $28B". 29 May 2026. Retrieved 5 October 2026.
- TaxGuru. "100% FDI Allowed in Insurance Under Automatic Route: Key Compliance Explained (with the text of DPIIT Press Note No. 1 of 2026)". 9 February 2026. Retrieved 5 October 2026.
- SCC Times. "Insurance Sector Opened to 100% Foreign Investment Under FEMA; LIC Retains 20% Cap". 6 May 2026. Retrieved 5 October 2026.
- Talwar Thakore & Associates. "NDI Rules amendment brings Press Note 3 reforms into force". Retrieved 5 October 2026.
- India Briefing. "India FDI Inflows Reach US$58.85 Bn in FY 2025-26: Mapping Top Growth Sectors for Investors". 4 June 2026. Retrieved 5 October 2026.
- All India Radio News (newsonair.gov.in). "India’s FDI inflows surge 14% to over $81 billion in FY 2024–25". 28 May 2025. Retrieved 5 October 2026.
- Invest India. "Top sectors attracting the most foreign direct investment in India". 10 July 2026. Retrieved 5 October 2026.
- Outlook Money. "FDI equity inflows jump 18% to $58.84 billion in FY26". 5 June 2026. Retrieved 5 October 2026.
- Department for Promotion of Industry and Internal Trade (DPIIT). "FDI equity inflow: focus year 2025-26 (April to December 2025)". Retrieved 5 October 2026.
- Department for Promotion of Industry and Internal Trade (DPIIT). "Fact Sheet on Foreign Direct Investment (FDI) inflow from April 2000 to June 2025". Retrieved 5 October 2026.
- KNN India. "India's FDI inflows reach USD 19.81 bn in April-June quarter: DPIIT". 26 September 2026. Retrieved 5 October 2026.
- Insurance Business Asia. "India allows 100% foreign direct investment in insurers under automatic route". 13 February 2026. Retrieved 5 October 2026.
- Invest India. "Investment Opportunities in Defence Sector". 25 June 2026. Retrieved 5 October 2026.
- Invest India. "Investment Opportunities in Telecom". 25 June 2026. Retrieved 5 October 2026.
- Invest India. "Investment Opportunities in Retail & E-commerce". 25 June 2026. Retrieved 5 October 2026.
- The Company Check. "Reliance Industries Limited". Company records, retrieved 15 October 2026.
