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Informist, Friday, Jun. 20, 2025

 

NEW DELHI - India moved one spot higher to become the 15th biggest recipient of foreign direct investment flows in 2024, according to a United Nations Conference on Trade and Development report released Thursday. India received $27.56 billion as FDI inflows in 2024, slightly lower than $28.08 billion in 2023.

 

"FDI to South Asia was broadly stable," the UN trade body said in its World Investment Report 2025. "While flows to India experienced a small decline, it remained the dominant recipient in the subregion, accounting for the vast majority of inflows."

 

Global FDI in 2024 rose 4% to $1.51 trillion. This headline figure, however, masks significant underlying weaknesses, the UN trade body said. "It was inflated by volatile financial flows through several European economies with high levels of conduit flows," the report said.

 

When volatile financial flows are excluded, global FDI flows declined 11% on a like-for-like basis to $1.49 trillion in 2024. This, the report said, marked the second consecutive year of double-digit contraction and confirming persistent fragility in international investment flows. 

 

The US remained the largest recipient of FDI in 2024 with inflows of $279 billion, followed by Singapore with inflows of $143 billion. China fell to the fourth spot last year with FDI inflows of $116 billion, down from $163 billion in 2023.

 

India's rank rose to 18th in terms of highest FDI outflows in 2024 from 23rd the previous year. India saw $23.78 billion of FDI outflows in 2024, sharply higher than $13.89 billion in 2023.

 

While gross FDI inflows remain robust, the sharp fall in net FDI inflows in 2024-25 (Apr-Mar) raised concerns recently. According to data by the Reserve Bank of India, gross FDI inflow in FY25 rose 13.7% on year to $81.04 billion, while net inflow during the same period fell sharply to $353 million from $10.13 billion in FY24, reflecting a rise in repatriation and outward FDI from India.

 

Earlier this month, RBI Governor Sanjay Malhotra said the rise in gross foreign direct investment in FY25 demonstrates that foreign investors continue to consider India a desirable investment destination. "Rise in repatriation is a sign of a mature market where foreign investors can enter and exit smoothly," Malhotra said on Jun. 6.

 

Greenfield project activity was strong in India in 2024, the report said. The number of greenfield projects announced by Indian investors increased 20% on year to 1,080 in 2024, ranking fourth in the world. India also ranked fifth in international project finance deals, securing 97 deals in 2024.

 

"Brazil, India and Chile now host more than 30% of international projects in developing economies – double their pre-2018 share – driven by strong renewable energy programmes," the report said. Countries such as India, Malaysia, and Vietnam have enhanced their appeal as manufacturing hubs, bolstered by trade shifts and industrial policies, it added.

 

India stood out with projected capital expenditures rising to $110 billion, almost a third of the total in Asia. Semiconductor and basic metals projects contributed to the rise in manufacturing activity in India, the report said.

 

"India and Indonesia continue to attract major smelting, rolling and processing facilities," the report said. "The data indicate a move towards fewer, but significantly larger and vertically integrated projects, aligning with global trends in resource security and supply chain localisation."  End

 

US$1 = INR 86.72

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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