India’s FDI Momentum Accelerates with USD 4.5 Billion Monthly Average in 2024
India has maintained strong foreign direct investment (FDI) inflows in 2024, averaging over USD 4.5 billion per month despite global economic uncertainties. With a 42% surge in FDI between January and September 2024 compared to the same period in 2023, the country has cemented its position as a preferred global investment destination. This momentum is expected to continue into 2025, driven by the strategic policies of Prime Minister Narendra Modi’s government aimed at fostering an investor-friendly ecosystem.
India’s recent initiatives, such as the national single window system for streamlined clearances and production-linked incentive (PLI) schemes, have significantly enhanced the country’s appeal to foreign investors. Other measures, including reducing compliance burdens, decriminalizing minor industry-related offences, and continually updating FDI policies based on stakeholder feedback, have further bolstered investor confidence.
Key sectors like services, computer software, telecommunications, and manufacturing have seen impressive FDI growth. The manufacturing sector alone recorded a 69% rise in equity inflows from USD 98 billion between 2004-2014 to USD 165 billion from 2014-2024, underscoring the effectiveness of India’s Make in India initiative.
India’s cumulative FDI inflows crossed the USD one trillion mark by September 2024, with Mauritius, Singapore, and the United States as the leading contributors. The government’s liberalization of sectoral caps, removal of regulatory barriers, and investment in infrastructure have played a crucial role in this achievement.
However, challenges remain. Experts highlight the need for simplifying FDI approval processes for nations sharing land borders with India and improving ease of doing business. Recommendations include establishing fast-track courts for corporate dispute resolution and creating a more transparent, time-bound system for FDI applications.
While countries like Vietnam and Thailand have outpaced India in benefiting from the “China Plus One” strategy, India is steadily gaining ground as a destination for companies diversifying manufacturing bases from China. This shift is expected to further strengthen India’s domestic manufacturing sector, particularly in high-tech industries.
With over 100 unicorns and Indian-origin companies like BYJU’S, Zomato, Ola, and Nykaa making waves globally, India’s startup ecosystem remains a key contributor to its economic success. As the country prepares for 2025, it aims to attract even greater foreign investment, solidifying its status as one of the world’s most dynamic and promising economies.
