Gross Foreign Direct Investment (FDI) inflows to India surged to $90.8 billion in January 2026, marking a 13% increase from the previous year. This growth was driven by a three-year high of $36.3 billion in FDI excluding repatriation, showing a 38.4% rise year-on-year. The FDI trend has been on a steady upward trajectory since January 2024, supported by robust macroeconomic fundamentals and a growing domestic demand.
The FDI pipeline in India is currently well-balanced, with investments coming in through greenfield projects, especially in the IT and banking sectors, and brownfield projects involving higher stakes of foreign companies in existing Indian ventures, joint ventures, mergers, and acquisitions, particularly in the financial sector and startups. The services sector continues to attract the majority of FDI inflows, holding a 46% share, while the manufacturing sector has seen diversification into areas like automobiles and electronics, backed by policy support.
India’s global market share in FDI rose slightly to 2.4% in 2025, just below the five-year average of 2.6%. Within Asia, India’s share in FDI-related flows increased to 6.4%, surpassing the five-year average of 5.7%. Despite these positive trends, net FDI remains low at $0.5 billion in January 2026, impacted by rising repatriation and outward FDI.
Analysts from Morgan Stanley are optimistic about the growth in gross FDI, expecting it to continue with support from both greenfield and brownfield investments. They foresee the trend to be sustained, although the flow magnitude may vary and be driven by specific deals. The outlook for net FDI remains crucial for India’s external balance sheet, as FDI serves as a stable source of financing for the current account.
