India, Jan 22 : Foreign Direct Investment (FDI) inflows into India jumped sharply by 73 per cent in 2025 to $47 billion, making the country one of the fastest growing investment destinations globally, according to a report by the United Nations Conference on Trade and Development (UNCTAD).
The UN trade body attributed the surge primarily to large investments in services such as finance, information technology and research and development, alongside manufacturing activity supported by government policies aimed at integrating India into global supply chains.
India’s FDI growth stood out even as overall investment into developing economies declined. UNCTAD noted that India was a clear outlier, recording one of the highest growth rates worldwide.
Data centres emerged as a major driver of inflows. Investments in the sector touched $7 billion during the first three quarters of the year, placing India seventh globally for data centre-related investments. The momentum strengthened further in the final quarter, making the sector increasingly dynamic.
Several global technology giants announced large commitments. Google said in October it would invest $15 billion in an AI hub in Andhra Pradesh. Microsoft followed in December with plans to invest $17.5 billion in AI and cloud infrastructure, while Amazon announced investments worth $35 billion in AI and other sectors. UNCTAD noted that these investments are likely to be rolled out over multiple years.
Globally, FDI flows rose 14 per cent to $1.6 trillion in 2025. Data centres accounted for nearly one-fifth of global greenfield investment values, with announced investments exceeding $270 billion, driven by demand for AI infrastructure and digital networks.
Semiconductors also saw strong growth, with the value of newly announced projects rising 35 per cent. However, sectors exposed to tariff risks, including textiles, electronics and machinery, witnessed a sharp 25 per cent fall in project numbers.
Most global FDI flowed into developed economies, where inflows rose 43 per cent to $728 billion. In contrast, developing economies saw a 2 per cent decline to an estimated $877 billion, underscoring India’s exceptional performance.
UNCTAD also reported that FDI into China declined for the third consecutive year, falling 8 per cent to an estimated $107.5 billion, with investments largely concentrated in strategic and high-growth sectors.
Despite headline growth, investor sentiment remained weak. The report noted a 10 per cent decline in the value of international mergers and acquisitions, while international project finance fell for the fourth straight year. Greenfield project announcements dropped 16 per cent, with overall values supported mainly by a limited number of mega-projects.
“The message is clear: headline growth overstates the recovery. Policymakers should focus on reviving real investment, not just financial flows,” UNCTAD said.