India Set for Strong FDI Growth as Reforms, Trade Pacts Boost Investor Confidence
FDI: India is expected to see a sharp increase in FDI next year, driven by new trade agreements, investor-friendly policies, and improved procedures. Investments are expected to reach over $60 billion by October 2025.
With significant announcements concerning major investments, initiatives regarding ease of business, and the promotion of new trade agreements on investments, the country is predicted to witness significant growth in the next year regarding foreign direct investments (FDI). The Department of Promotion of Industry and Internal Trade (DPIIT) has organized various meetings this year regarding how FDI could be increased.
In the month of November, Commerce and Industry Minister Piyush Goyal also had meetings regarding how the government can encourage more investment by making the process faster, smoother, and more efficient. Investor-friendly policies and procedures have now been made simpler, and this situation has led to high returns on investment. A few of the most prominent changes that have attracted foreign investors to India during challenging global conditions are the decriminalization of small errors in the industry and the ease of approval.
Despite global uncertainties, total foreign direct investment (FDI) reached a record high of over $80.5 billion in 2024-25. It exceeded $60 billion during January-October 2025. It is expected to reach $80.62 billion by the end of March. India has attracted significant investment over the past 11 years due to various government initiatives. India is also relying on its free trade agreement with the four-nation European Free Trade Association, under which the group has committed $100 billion in investment to the country over 15 years.
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FDI in developed countries declined by 22 percent. Investment in developing economies remained stable. Investors maintained strong project activity in Asia, particularly East and Southeast Asia, as well as India. Some major global companies have announced major investments this year. Microsoft has announced an investment of $17.5 billion by 2030 to help build infrastructure and sovereign capabilities for the country's AI-centric future. Amazon plans to invest $35 billion over the next five years. Google will also invest $15 billion during the same period.
New Zealand has made a similar commitment of $20 billion under its trade agreement with India, which is to be implemented in 2026. According to the United Nations Conference on Trade and Development Report 2025, global FDI fell by 11 percent to $1.5 trillion in 2024.
