India FDI Inflow Report FY25 reveals that the U.S. and Singapore together contributed one-third of total foreign investments. The RBI FLA Census 2024–25 highlights strong FDI in manufacturing and rising outward investments by Indian companies.
U.S. and Singapore Together Provide One-Third of India’s FDI in FY25: Key Insights
The latest report by the Reserve Bank of India (RBI) reveals that in the financial year 2024-25, the United States and Singapore together contributed more than one-third of India’s inward Foreign Direct Investment (FDI)
This underscores India’s growing attraction as an investment destination and the central role played by these two countries in channeling capital into India.
Major Investment Sources
According to the provisional results of the RBI’s annual Foreign Liabilities and Assets (FLA) Census 2024-25, covering data on Indian entities’ cross-border liabilities and assets, there were 45,702 Indian companies participating, of which 41,517 reported either FDI (inward investment) or ODI (outward investment).
Key figures:
- Total FDI for 2024-25 stood at ₹68,75,931 crore.
- The U.S. accounted for ~20% of the total, while Singapore accounted for ~14.3%.
- Other major source countries included Mauritius (13.3%), UK (11.2%) and Netherlands (9%) of total FDI.
Sector-Wise Distribution of FDI
The report shows that the manufacturing sector received the highest share of FDI equity (market value) at 48.4%, followed by services sector with significant inflow as well.
This signals that India is moving towards being a major production hub, not just a services destination.
Outward Direct Investment (ODI) Trends
The RBI data also covers ODI—investments by Indian companies abroad. In FY25, ODI stood at ₹11,66,790 crore.
Notable allocations:
- Singapore accounted for 22.2% of ODI
- United States did 15.4%
- UK: 12.8%
- Netherlands: 9.6%
Interestingly, ODI growth (17.9%) outpaced FDI growth (11.1%) in FY25, indicating that Indian firms are stepping up their global expansion.
Profile of Investment Entities
- Over 97% of companies reporting were unlisted firms, yet they held the major share of FDI equity capital.
- About 90.5% of total FDI equity (face value) was held by non-financial companies — showing strong industrial participation.
- The ratio of inward to outward direct investment stood at 5.9 times in March 2025, compared to 6.3 times the previous year.
Why This News Is Important
Relevance for Economy & Policy
This news is of vital importance as it reflects the health of India’s economy and its attractiveness to global capital. For students preparing for government exams (banking, railways, civil services), understanding where FDI comes from and how sectors are targeted helps in tackling questions on India’s economic policy, foreign investment, and global links.
The fact that the U.S. and Singapore together contribute more than one-third of India’s FDI reveals both dependency and strategic partnerships — topics often explored in exams under foreign trade, investment policy, and geo-economics.
Implications for Various Sectors
The high share of FDI into manufacturing and services shows that India’s strategic push towards production (Make in India, Atmanirbhar Bharat) is bearing fruit. This point is especially relevant for aspirants of civil services or state public service commissions who need to discuss sectoral growth, challenges in manufacturing, and employment generation.
Also, the rising outward investment (ODI) indicates that Indian firms are becoming global players — a trend that might appear in questions about India’s global economic footprint. Understanding this shift adds depth to answers in exams.
Historical Context
India’s journey to become an attractive destination for foreign direct investment has evolved markedly since liberalisation in 1991. Initially, global investors were cautious. Over time, policy reforms – such as opening up sectors, simplifying FDI norms, introducing single-window clearances, and aligning with global supply chains – paved the way for greater inflows.
The establishment of the FLA census by the RBI helps track liabilities and assets, giving a clearer picture of cross‐border flows. Earlier decades saw dominant investment flows via certain jurisdictions (e.g., Mauritius) often due to tax treaties and intermediary routing. For example, Mauritius used to be the largest source of FDI into India for years due to tax-treaty benefits.
Now the shift: The U.S. and Singapore emerging as top investors signals a more diversified and mature investment ecosystem — one less reliant on shell companies and more on genuine strategic capital. Also, India’s shift to manufacturing and services now resonates with global shifts in supply chains (e.g., China +1 strategy). Recognising this historical progression is essential for competitive exam aspirants when discussing India’s FDI regime, policy changes, and global linkages.
Key Takeaways from “U.S. and Singapore Contributed One-Third of India’s FDI in FY25”
| S.No. | Key Takeaway |
|---|---|
| 1 | The U.S. (~20%) and Singapore (~14.3%) together supplied more than one-third of India’s total FDI in FY 2024-25. |
| 2 | Total inbound FDI for India in FY 2024-25 stood at ₹68,75,931 crore, up from about ₹61,88,243 crore in the previous year. |
| 3 | Manufacturing sector received the highest share of FDI equity (48.4% by market value), reflecting India’s growing role as a production hub. |
| 4 | India’s outward direct investment (ODI) in FY 2024-25 was ₹11,66,790 crore; ODI growth (17.9%) outpaced FDI growth (11.1%) in the same period |
| 5 | Over 97% of the companies reporting FDI/ODI were unlisted firms, and about 90.5% of total FDI equity (face value) was held by non-financial companies — showing strength in the industrial sector. |
FAQs: Frequently Asked Questions
1. What percentage of India’s total FDI came from the U.S. and Singapore in FY25?
As per the RBI’s FLA Census 2024–25, around 34% (one-third) of India’s total FDI inflow came from the United States and Singapore combined.
2. Which sectors received the maximum FDI in India during FY25?
The manufacturing sector received the largest share of FDI equity at 48.4%, followed by the services sector.
3. What was the total value of India’s inward FDI during FY25?
The total inward FDI was valued at ₹68,75,931 crore according to RBI’s provisional data.
4. What does the term ODI stand for, and how is it different from FDI?
ODI stands for Outward Direct Investment, which refers to Indian companies investing abroad, while FDI refers to foreign companies investing in India.
5. Which country accounted for the largest share of India’s ODI in FY25?
Singapore was the leading destination for India’s outward investments, accounting for 22.2% of ODI in FY25.
6. What is the RBI’s FLA Census, and why is it conducted?
The Foreign Liabilities and Assets (FLA) Census is an annual exercise by the RBI that collects financial data from Indian entities on their foreign assets and liabilities to understand cross-border investment trends.
7. What was the ratio of inward to outward investment in March 2025?
The ratio stood at 5.9 times, down slightly from 6.3 times recorded the previous year.
8. Why is the rise in ODI significant for India’s economy?
The increase in ODI indicates that Indian firms are expanding globally, showing confidence in international markets and diversifying beyond domestic opportunities.
9. Which reforms have helped India attract higher FDI inflows in recent years?
Liberalization of FDI caps, simplification of approval processes, sectoral reforms, and policy initiatives such as “Make in India” and “Ease of Doing Business” have helped India attract more investment.
10. How can this FDI trend influence India’s economic growth in the coming years?
Sustained FDI inflows in manufacturing and services sectors can boost employment, infrastructure, innovation, and export competitiveness, strengthening India’s long-term growth trajectory.
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