India Climbs to 11th in Global FDI Inflows in 2025

TL;DR

• India climbed to 11th globally for FDI inflows in 2025, up from 13th inflows grew 44% YoY to $39 billion
• India is now the largest AI-related FDI recipient globally after the EU and US, anchored by Google’s $14.5 billion planned investment in Visakhapatnam
• Ranks 2nd globally for megaprojects ($1bn+ investments), behind only Egypt
• FDI-to-GDP ratio is just 1.0% still below Vietnam, Brazil, Saudi Arabia, and Mexico, despite the higher absolute inflow
• Outbound FDI hit $36 billion, up 50%, pushing India to 18th globally as a source economy
• The bigger signal: capital is entering India’s economy faster than its exit infrastructure IPOs, M&A, secondaries is scaling to match it, widening the opportunity for secondaries and continuation-vehicle structures

India’s FDI Inflows: The Five-Year Trend

Where India Ranks Globally on FDI Inflows (2025)

India’s 44% growth rate outpaced every economy ranked ahead of it but the absolute figure still lags well behind the top five. India also ranks second globally as a host for megaprojects (investments of $1 billion or more), trailing only Egypt and ahead of the UK and Brazil.

Is India’s FDI Large Relative to Its Economy? Not Yet.

Despite the improved global rank, India’s FDI-to-GDP ratio remains modest compared to other large emerging markets:

India draws roughly a quarter of Vietnam’s FDI intensity relative to GDP, and less than a third of Brazil’s. Foreign capital is clearly attracted to India’s growth story, but has not yet been allocated to India in proportion to the size of its economy. That catch-up runway is the kind of structural tailwind that underpins long-duration private capital theses, the same ones being priced into growth equity and pre-IPO secondary transactions today.

Manufacturing Is Pulling Ahead of Services in Greenfield Capital

Announced greenfield investment by sector shows a clear rotation. Manufacturing stood at $23 billion against services’ $34 billion in 2015; by 2025, manufacturing had climbed to $47 billion, overtaking services at $27 billion. India’s share of EU materials and industrial manufacturing greenfield investment rose to 35%, up from just 9% in 2015–19.

This mirrors a broader pattern visible across India’s private capital markets: industrial and energy sectors are attracting larger, more concentrated capital cheques even as overall PE deal count falls elsewhere. Greenfield FDI into manufacturing today is effectively seeding the next generation of companies that will need growth capital and then liquidity events over the next five to seven years.

Outbound FDI Is the Quiet Signal for Exit Planning

India’s outward investment reached $36 billion in 2025, up 50% year-on-year, moving India to 18th globally as an FDI source economy, its first appearance in the global top 20 in recent years. Rana Group’s $10 billion announced UAE project was the single largest contributor. India also became one of the top three destinations for AI infrastructure and tech greenfield projects globally between 2020 and 2025, alongside the EU and USA.

Indian firms becoming outbound acquirers and capital exporters matters directly for private equity exit math: a strategic buyer base that increasingly includes large, cash-generative Indian conglomerates expands the universe of trade-sale exits available to portfolio companies as an alternative pressure valve alongside IPOs and secondary sales when public market windows are inconsistent.

Why This Matters for Secondaries and Exit Planning

Three threads from this data connect directly to the exit and liquidity conversation in Indian private markets:

1. Capital in, liquidity lagging. Rising primary FDI and greenfield investment is building more companies faster than India’s IPO pipeline and M&A market can currently absorb a dynamic that historically widens the gap between paper valuations and realized, distributable returns.
2. Bigger single-project tickets. India’s #2 global rank in megaprojects plus AI infrastructure inflows like Google’s $14.5 billion Visakhapatnam commitment signals capital increasingly arriving in large, concentrated blocks, consistent with the broader “fewer, larger deals” pattern also visible in India’s PE deal data.
3. A broader exit universe is forming. As Indian firms become outbound acquirers in their own right, portfolio companies gain an additional category of strategic buyer beyond traditional trade sale or IPO routes, a meaningful development for portfolio construction and secondary deal sourcing alike.

Chief Brand & Investor Relations Officer

Sneha Dadrwal

Frequently Asked Questions

Q: What is India's global rank in FDI inflows in 2025?

A: India ranks 11th globally, up two positions from 2024, with inflows of $39 billion, per the UNCTAD World Investment Report 2026.

Q: How much did India's FDI inflows grow in 2025?

A: Inflows grew 44% year-on-year, the fastest growth rate among the world's top FDI destinations.

Q: Is India's FDI large relative to its economy?

A: Not yet. India's FDI-to-GDP ratio was 1.0% in 2025, lower than Vietnam (4.1%), Brazil (3.4%), Saudi Arabia (2.6%), and Mexico (2.2%), despite India's larger absolute inflows than most of these peers.

Q: What role does AI investment play in India's FDI story?

A: India became the largest AI-related FDI recipient globally after the EU and USA, led by Google's planned $14.5 billion investment in Visakhapatnam, and ranked among the top three recipients of AI infrastructure and tech greenfield projects globally from 2020–2025.

Q: How much outbound investment did India make in 2025?

A: $36 billion, up 50% year-on-year, moving India to 18th globally as an FDI source economy, its first appearance in the global top 20 in recent years.

Q: Why does rising FDI matter for private equity exits in India?

A: Because capital is entering India's economy faster than its exit infrastructure, IPOs, M&A, and secondary markets can currently absorb it. That gap is a key driver behind rising interest in secondaries and GP-led continuation vehicles as alternative liquidity routes.

Sources

UNCTAD