Singapore Emerges as India's Top FDI Source for Seven Consecutive Years

Singapore Leads Foreign Investment in India

If you believe that India's closest investment partners are Russia, the USA, or the UK and Germany, you might be mistaken. The country that has consistently invested in India over the past seven years is none other than Singapore. This small nation has topped the charts for foreign direct investment (FDI) in India, surpassing investments from the USA and Japan by three to five times in the last fiscal year, with over ₹1.28 lakh crore.

Singapore's Dominance in FDI

For seven consecutive years, Singapore has been the largest source of FDI in India. In the fiscal year 2024-25, Singapore is expected to contribute around $15 billion in foreign investments. The total FDI, which includes equity flows, reinvested income, and other capital, rose by 14% to reach $81.04 billion, marking the highest figure in the last three years. According to recent government data, FDI from Singapore increased from $11.77 billion in 2023-24 to $14.94 billion in 2024-25, accounting for nearly 19% of total inflows.

Other Significant Investors

Previously, in 2017-18, Mauritius was the leading source of FDI for India. In the last fiscal year, Mauritius contributed $8.34 billion, followed by the USA ($5.45 billion), the Netherlands ($4.62 billion), the UAE ($3.12 billion), Japan ($2.47 billion), Cyprus ($1.2 billion), the UK ($795 million), Germany ($469 million), and the Cayman Islands ($371 million). Experts attribute Singapore's status as a top FDI source to its strong position as a global financial hub, enhanced bilateral relations, and its role as a gateway for global private equity and venture capital investments.

Expert Insights

According to Rumki Mazumdar, an economist at Deloitte India, despite volatility in capital markets and uncertainties in trade, India has successfully attracted substantial foreign investments that are stable and long-term. She noted that Asia is the second-largest sector for foreign capital inflows, with a significant portion coming from Singapore. The country is seen as a strategic financial gateway for Asia due to its low-tax environment and robust legal framework. Mazumdar also mentioned that the double taxation avoidance agreement between the two nations facilitates investments from Singaporean firms into India, reducing their overall tax burden on earnings from India.