FinMin sees investor confidence sustaining in FY26 despite global headwinds

FM Nirmala Sitharaman

Amid concerns over falling foreign direct investments (FDI), the finance ministry on June 27 said FDI inflows of $8.8 billion in April 2025-26 versus $7.2 billion during the same period last year, indicates sustained investor confidence despite global headwinds.

For FY25, gross FDI inflows into India stood at $81 billion. Of this, equity inflows accounted for $50 billion, a 13 percent increase on-year. The inflows remained concentrated in key sectors, with around 60 percent directed towards services, computer software and hardware, trading, nonconventional energy, construction, and the automobile industry, the review said.

The ministry added that India remained the largest recipient of FDI inflows in the calendar year 2024 supported by robust new project announcements, particularly in the manufacturing sector such as in semiconductors and basic metals.

While, India recorded a marginal decline of 2 percent in FDI inflows in calendar year 2024, the country surpassed major Asian peers such as Indonesia and Vietnam in total FDI received, according to the ministry's Monthly Economic Review for May 2025.

The review noted that the global FDI landscape remained subdued in 2024, continuing the broader slowdown in cross-border investment seen in recent years.

According to UNCTAD’s World Investment Report (2025), global FDI flows declined by 11 per cent (YoY)15, marking the second consecutive year of contraction. A large part of the decline stemmed from a 58 percent fall in FDI to Europe alongside a 29 percent decline in China.

"Despite tighter financing conditions and heightened geopolitical uncertainty, FDI inflows to developing economies remained broadly stable at $867 billion (57 percent of global FDI) in CY24.

Asia continued to be the largest recipient region, although it recorded a modest 3 percent decline in inflows.