India has reached a significant milestone this week by becoming a top global investment destination. Latest data shows that Foreign Direct Investment (FDI) into India has crossed the $1 trillion mark since the start of the 21st century, showing the country's growing appeal to foreign investors.

According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), India's cumulative Foreign Direct Investment (FDI) reached $1.03 trillion between April 2000 and September 2024. This figure includes equity, reinvested earnings, and other capital, marking India’s strong position as a global investment hub.

The Ministry of Commerce and Industry stated that India's growing appeal as a global investment destination is reflected in the increase in Foreign Direct Investment (FDI). It pointed out that FDI has been key to India's growth by providing important financial resources, promoting technology transfer, and creating jobs.

According to the Ministry of Commerce and Industry, “Initiatives like 'Make in India', liberalised sectoral policies, and the Goods and Services Tax (GST) have enhanced investor confidence, while competitive labour costs and strategic incentives continue to attract multinational corporations.”

India, the fifth-largest global economy, has a GDP of approximately $3.89 trillion in 2024, up from around $2 trillion in 2014. Over the past two decades, the country has received an FDI inflow of $1 trillion.This shows that, while India's economy has grown significantly, the $1 trillion FDI inflow has played a crucial role in supporting and accelerating this development. The FDI has been instrumental in boosting economic growth, creating jobs, and fostering technology transfers.

So, the question arises: where does this FDI come from? Which countries are making these investments? To your surprise, the largest contributor to FDI in India during this period is Mauritius.This small island country contributes 25% of all foreign investments in India. Singapore follows closely behind, providing 24%. The United States contributes 10%, while other key countries include the Netherlands (7%), Japan (6%), the UK (5%), and the UAE (3%).

Sectors that received the largest investment

The sectors that received the highest investment were the services and allied sectors. Significant investments were also made in computer software and hardware, telecommunications, trading, construction, infrastructure development, automobiles, chemicals, and pharmaceuticals.

FDI is allowed automatically in most sectors, but in areas like telecom, media, pharmaceuticals, and insurance, foreign investors need government approval.

With government approval, investors must get permission from the relevant department. Under the automatic route, they just need to inform the Reserve Bank of India (RBI) after investing.
FDI is not allowed in some sectors, such as lottery, gambling, chit funds, real estate, and tobacco product manufacturing.