India Sees 6% Rise in FDI Despite Significant Drop from US Investors

Overview of Foreign Direct Investment in India

New Delhi: In the first quarter of the fiscal year, India experienced a 6% increase in foreign direct investment (FDI), reaching USD 19.81 billion. However, investments from the United States saw a dramatic decline of over 76%, as reported by the Department for Promotion of Industry and Internal Trade (DPIIT).

In comparison, the overseas investments totaled USD 18.62 billion during the same timeframe in the previous fiscal year 2025-26.

Despite the overall increase, there was a notable drop in inflows in May, which fell by more than 45% to USD 2.8 billion, and a decrease of approximately 29% to USD 4.91 billion in June.

April saw a significant surge, with FDI nearly doubling to USD 12.1 billion from USD 6.6 billion in April 2025, according to the data.

Japan led the way as the top investor in the first quarter, contributing USD 5.71 billion, followed closely by Singapore at USD 5.22 billion, Mauritius at USD 2.31 billion, the Netherlands at USD 1.38 billion, the US at USD 1.34 billion, and the UAE at USD 868 million.

The FDI from the US plummeted to USD 1.34 billion in April-June 2026-27, down from USD 5.61 billion during the same period last year. Similarly, inflows from the UAE decreased from USD 1 billion to USD 868 million.

Key sectors attracting substantial FDI include services (USD 7.04 billion), computer software and hardware (USD 2.84 billion), trading (USD 1.92 billion), non-conventional energy (USD 1.24 billion), and the automotive sector (USD 622 million).

Overall, total FDI, which encompasses equity inflows, reinvested earnings, and other capital, rose by about 22% to USD 30.65 billion during the April-June 2026-27 period.

Among Indian states, Tamil Nadu received the highest FDI inflow of USD 5.95 billion, followed by Maharashtra with USD 4.22 billion, Delhi at USD 2.67 billion, Karnataka at USD 2.11 billion, and Gujarat at USD 1.3 billion.