New Delhi: India has reached a significant milestone in its economic journey, with foreign direct investment (FDI) inflows surpassing $1 trillion since April 2000. This achievement is underpinned by a 26% increase in FDI to $42.1 billion during the first half of FY 2024-25, highlighting the country’s growing appeal as a global investment hub. This growth is the result of a proactive policy framework, a dynamic business environment, and India’s increasing international competitiveness.
The rise in FDI reflects India’s transformation, fueled by initiatives such as “Make in India,” liberalized sectoral policies, and the implementation of Goods and Services Tax (GST). These efforts, combined with competitive labor costs and strategic incentives, have enhanced investor confidence. Over the last decade (2014-2024), India attracted $709.84 billion in FDI, contributing to nearly 69% of its total FDI inflow in the past 24 years.
Key factors driving this achievement include:
- Competitiveness and Innovation: India has made significant strides in global competitiveness, ranking 40th in the World Competitive Index 2024, up from 43rd in 2021. It also ranks 48th in the Global Innovation Index 2023, a major improvement from 81st in 2015.
- Global Investment Standing: India is the third-largest recipient of greenfield projects, with 1,008 new project announcements in 2023. It also saw a 64% increase in international project finance deals, marking it as a prominent global player in investment.
- Improved Business Environment: India’s leap from 142nd to 63rd in the World Bank’s Doing Business Report from 2014 to 2020 demonstrates the government’s successful efforts to simplify regulations and create a business-friendly environment.
- Policy Reforms: The government has introduced several investor-friendly policies, including allowing 100% FDI in most sectors under the automatic route, amending the Income Tax Act to abolish angel tax, and reducing corporate tax rates for foreign companies.
With a robust infrastructure, enhanced global rankings, and attractive investment policies, India is well-positioned to continue attracting substantial FDI and strengthening its role in the global economy.
