Summary of this article
FDI equity inflows increased 18 per cent to $58.84 billion in FY26, led by strong US investments and broad sector participation
Computer hardware, services, energy and manufacturing remained top recipients of FDI
Maharashtra, Karnataka and Gujarat led FDI inflows
Foreign Direct Investment (FDI) equity inflows into India rose 18 per cent in the financial year 2025–26 to $58.84 billion, according to data released by the Department for Promotion of Industry and Internal Trade (DPIIT). Much of this inflow was driven largely by a sharp jump in inflows from the US. The rise is coming at a time when global investment flows are still uneven, with capital slowly concentrating in faster-growing emerging markets.
US FDI more than doubled during the fiscal year, rising to $11.17 billion from $5.45 billion in FY25.
Singapore remained the largest source of FDI with $19.8 billion, followed by the US. Other key contributors included Mauritius at $6.57 billion, Japan at $3.74 billion, and the Netherlands at $3.37 billion.
On a cumulative basis, Singapore and Mauritius remain the biggest sources of FDI into India. Since April 2000, Singapore has invested about US$194.7 billion in equity inflows, followed closely by Mauritius at US$186.8 billion. The US stands third with cumulative investments of US$81.8 billion.
Top Sectors Attracting FDI In FY26
Computer software and hardware attracted the highest inflows at $13.94 billion during April–December FY26. The services sector followed with $10 billion, while trading and non-conventional energy recorded inflows of $4 billion and $3 billion, respectively. FDIs into automobile and pharma sectors also witnessed a significant growth in FY26.
FDI Inflows By State: Maharashtra Leads
Among states, Maharashtra retained its position as the top recipient of FDI at $18.41 billion, followed by Karnataka with $12.93 billion and Gujarat with $5.71 billion. States like Rajasthan and Uttar Pradesh saw strong year-on-year growth, showing that foreign investors are now looking beyond traditional hubs and increasingly investing in emerging manufacturing and infrastructure centres across India.
Recent Policy Reforms Supporting FDI Inflows
In 2026, India further refined its FDI framework to improve ease of doing business. A key change was a relaxation under Press Note 3 (PN3), which applies to investments from countries sharing a land border with India. Under the revised rule, minority investments with beneficial ownership below 10 per cent are allowed through the automatic route, as long as they do not result in control and meet sectoral norms.
Separately, the government introduced a 60-day fast-track approval system for proposals in strategic manufacturing areas, including electronics components, capital goods, semiconductors and inputs for solar manufacturing.
