India's FDI returns outshine other emerging markets
India's foreign investment scene is looking strong—returns on foreign direct investment (FDI) here averaged 7.3%, beating many other emerging economies.
This happened even as global FDI-to-GDP ratios dropped from 2.4% in 2021 to just 1.3% in 2024.
Where the money's going—and why net numbers dipped
India kept attracting $70-85 billion in gross FDI each year from FY20 to FY25. But net FDI fell sharply—from $44 billion down to just $1 billion—mainly because more investors are pulling their money out (repatriation).
The largest share of new equity went to services (19%), with computer software and hardware at 16% and trading at 8%.
Big repatriations and what's next
Repatriation and outflows rose sharply by FY25 (implied ~$80 billion combined, given gross inflows of $81 billion and net FDI of $1 billion in FY25).
Still, India recorded a 13% rise in gross inflows in FY25, to $81 billion, a sign that global investors still see plenty of promise here.