India has reached a significant milestone this week, solidifying its position as a leading global investment hub. New data from the Department for Promotion of Industry and Internal Trade (DPIIT) reveals that Foreign Direct Investment (FDI) in India has surpassed a remarkable $1 trillion since the turn of the century, underscoring the country’s growing appeal to international investors.

Between April 2000 and September 2024, the cumulative FDI, encompassing equity, reinvested earnings, and other forms of capital, totaled $1,033.4 billion (or $1 trillion). To put this in perspective, imagine earning a dollar every second—reaching a million dollars would take just 11.5 days, a billion dollars would take almost 32 years, and an eye-watering 31,709 years would be needed to amass $1 trillion.

For a clearer comparison, India, currently the fifth-largest global economy with a GDP of approximately $3.89 trillion in 2024, has seen its GDP more than double from $2 trillion in 2014. This $1 trillion in FDI over two decades further highlights the country’s growing economic significance.

Sources of FDI: The Leading Contributors

A closer look at the sources of this vast inflow reveals some surprising results. While one might expect the United States or China to lead, the top contributor to India’s FDI is Mauritius, accounting for a substantial 25% of total inflows. Singapore follows closely with 24%, and the United States ranks third with 10%.

Other notable investors include The Netherlands (7%), Japan (6%), the United Kingdom (5%), the UAE (3%), and several others such as the Cayman Islands, Germany, and Cyprus, each contributing around 2%.

Key Sectors Receiving Investment

The services sector has attracted the largest portion of this investment, with significant contributions also flowing into computer software and hardware, telecommunications, trading, construction, infrastructure, automobiles, chemicals, and pharmaceuticals.

Surge in FDI Inflows

Of the total $1,033 billion in FDI, an impressive $667.4 billion came in the last decade (2014-2024), reflecting a 119% increase compared to the previous decade. The data further highlights that FDI has been spread across 60 sectors in 31 states and union territories of India.

India’s liberal and attractive investment policies, including reforms that allow up to 100% FDI in most sectors under the automatic route, have significantly contributed to this surge. This includes the ‘Make in India’ initiative, which has driven a 69% rise in FDI within the manufacturing sector over the past ten years.

FDI Regulations and Procedures

FDI is allowed through the automatic route in most sectors, with a few exceptions such as telecom, media, pharmaceuticals, and insurance, where government approval is required. Under the automatic route, foreign investors must inform the Reserve Bank of India (RBI) after making the investment. In contrast, the government approval route requires prior approval from the relevant ministry or department.

However, certain sectors remain off-limits for FDI, including lotteries, gambling, betting, chit funds, Nidhi companies, real estate business, and the manufacturing of tobacco-related products.

This surge in FDI demonstrates India’s growing stature as an investment destination and highlights the success of its economic reforms and liberal policies in attracting foreign capital.