India’s gross investment inflows hold steady at 18.5% of GDP in FY25: Chief Economic Adviser Nageswaran at Global Securities Markets Conclave

Chief Economic Adviser V Anantha Nageswaran (File image)

• India's investment inflows reached 18.5% of GDP in FY25
• FDI dip in 2024 was just 2%, milder than other emerging markets
• Reforms, stability, tech enhance India's investor appeal

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“The response of global investors provides empirical validation of the various structural improvements (we’ve undergone),” said Chief Economic Adviser Dr. V. Anantha Nageswaran pointing to India’s ability to draw steady capital even as global conditions tighten.

In a measured assessment delivered from the heart of India’s emerging international financial hub, Nageswaran highlighted that gross investment inflows, covering portfolio investments in equities and bonds as well as foreign direct investment, reached 18.5% of GDP in FY25 and stood at 16.9% in the first half of FY26.

Delivering the keynote at the Global Securities Markets Conclave 2.0 in GIFT City, Nageswaran framed these numbers as hard evidence that India's years of institutional reforms are paying off, even as global investors grow pickier amid geopolitical tensions and AI-driven market shifts. "The response of global investors provides empirical validation of these structural improvements," he said. "Cross-border financial flows, remain central to India's integration with global capital markets."

The figures stand out against a backdrop of caution elsewhere. Nageswaran pointed to UNCTAD data showing India posted only a modest 2% dip in FDI inflows in calendar 2024, far milder than the steeper declines hitting several large emerging markets. The country held its position as South Asia's top gross FDI recipient and outpaced regional peers like Indonesia and Vietnam.

What explains the resilience? Nageswaran credited a steady build-up that is, stronger microeconomic stability, better governance and transparency, sharply lower transaction costs. Primarily due to the digital public infrastructure and deeper domestic capital markets drawing in wider participation.

"Investors have become more discerning, preferring jurisdictions that combine macroeconomic stability with geopolitical alignment and technological readiness," he noted, tying India's appeal directly to these qualities in an era where capital chases not just returns but reliability.

Nageswaran didn't shy away from the bigger picture that global markets are being reshaped "not by a single stock, but by the simultaneous forces of geopolitics and technological acceleration." Yet India's structural, rather than episodic progress has kept inflows resilient, offering a counter-narrative to broader volatility.