Strong fundamentals, big-ticket investments to propel India’s FDI in 2026
To ensure that India remains an attractive and investor-friendly destination, the government constantly reviews its Foreign Direct Investment (FDI) policy and makes changes from time to time after extensive consultations with stakeholders.
The Department for Promotion of Industry and Internal Trade (DPIIT) has held a series of meetings with stakeholders this year on ways to promote foreign direct investment. In November, Commerce and Industry Minister Piyush Goyal also held consultations on ways to attract more investments by making processes faster, smoother and more efficient.
Investor-friendly policies and regulatory practices, strong returns on investments, a skilled workforce, easing of compliance burden, decriminalization of minor industry-related offenses and streamlined approvals are the key measures that enable foreign investors to focus on India despite global challenges.
Amid global uncertainties, total foreign direct investments (FDI) exceeded $80.5 billion in 2024-25. In the period January-October 2025, gross foreign investments exceeded 60 billion dollars.
DPIIT Secretary Amardeep Singh Bhatia said India has attracted significant investments in the last eleven years due to a series of measures taken by the government.
“It has reached an all-time high of US$ 80.62 billion in 2024-25. This year (2026), we hope that FDI may surpass last year’s data of US$ 80.62 billion,” he told PTI. years.
The agreement came into force on October 1, 2025, and on the very day it was implemented, Swiss healthcare giant Roche Pharma announced its commitment to invest 1.5 billion Swiss francs (approximately Rs 17,000 crore) in India over the next five years.
This would be pure foreign direct investment, not foreign corporate or portfolio investments by sovereign wealth funds of the EFTA countries (Switzerland, Norway, Iceland and Liechtenstein).
A similar commitment of $20 billion was made within the scope of New Zealand’s trade agreement with India, which is planned to be implemented in 2026.
Some reports have also predicted a positive outlook for foreign direct investment into India.
According to UNCTAD’s 2025 World Investment Report, global foreign direct investment flows decreased by 11 percent in 2024, falling to 1.5 trillion dollars. However, this figure hides differences in performance between economies.
While developed countries experienced a 22 percent contraction, flows to developing economies remained stable. The report stated that investors continue to maintain strong project activities in Asia, especially in east and southeast Asia, as well as in India.
Some of the major global companies have announced major investments this year.
Microsoft CEO Satya Nadella announced that the country will invest $17.5 billion by 2030 to help build infrastructure and sovereign capabilities for its AI-first future.
Amazon plans to invest $35 billion in India over the next five years to expand its business from express commerce to cloud computing and artificial intelligence.
Google will invest $15 billion over the next five years to set up an AI center in India.
iPhone maker Apple is expanding its presence in India and South Korean electronics giant Samsung is also expanding its manufacturing portfolio in the country.
Arcelormittal Nippon Steel India aims to increase its coated steel capacity to 10 lakh tonnes per annum by 2026 from the current 7 lakh tonnes.
According to the National Statistical Office (NSO), the Indian economy grew by 8.2 per cent in the second quarter of 2025-26. The government introduced the second edition of the Jan Viswas bill to promote ease of doing business by decriminalizing minor offenses related to the industry.
Experts also stated that India’s strong economic fundamentals and resilience, along with sustainable reform efforts, will be a major reason for the revival of foreign direct investments in 2026.
Rumki Majumdar, India Economist at Deloitte, said: “As India diversifies its economic engagements amid geopolitical uncertainties and moves up the value chain in manufacturing and services, these developments are expected to channel more long-term foreign direct investment into services, software and electronics.”
Rudra Kumar Pandey, partner at Shardul Amarchand Mangaldas & Co, said foreign direct investments from Gulf Cooperation Council (GCC) countries are emerging as a strategic and increasingly resilient pillar of India’s foreign investment environment.
“Technology-focused services are expected to continue to be the primary magnet for foreign capital, with increasing emphasis on AI, data analytics, cloud infrastructure and Global Talent Centers focused on AI deployment and applied research,” he added.
The largest investors in India include Mauritius and Singapore (about 49 percent in total), followed by the United States (10 percent), the Netherlands (7.2 percent), Japan (6 percent) and the United Kingdom (5 percent).
Key sectors attracting the highest foreign direct investment in India include services segment, computer software and hardware, telecommunications, trade, construction development, automobile, chemicals and pharmaceuticals.
Foreign direct investment is allowed automatically in most sectors; In areas such as telecom, media, pharmaceuticals and insurance, state approval is required for foreign investors.
Foreign direct investment is currently prohibited in certain sectors. These are lottery, gambling and betting, deposit funds, nidhi company, real estate business and production of cigars, cigars, cigars and cigarettes using tobacco.
Foreign direct investment is important as India’s infrastructure sector needs major investments in the coming years to fuel growth. Healthy foreign inflows also help maintain the balance of payments and the value of the rupee.
