New Delhi, September 21 (Daily Kiran) : A recent report released by the industry body Assocham emphasizes that India’s approach to foreign direct investment (FDI) should evolve beyond merely attracting capital. The next phase must focus on fostering an environment conducive to sustainable investment that integrates deeply with the country’s economic and industrial framework.
Over the past 25 years, the landscape of FDI in India has transformed significantly. According to data from the Department for Promotion of Industry and Internal Trade (DPIIT) and the Reserve Bank of India (RBI), total FDI inflows surged from $4 billion in the fiscal year 2000-01 to nearly $95 billion in 2025-26. During the same period, FDI equity investments increased from $2 billion to $59 billion.
The report indicates that from 2000-01 to 2025-26, India received a total of $1.16 trillion in FDI, with equity investments reaching $791 billion. This trend reflects India’s growing integration into the global economy and the gradual liberalization of its FDI policies.
Nirmal Minda, President of Assocham, stated that India has laid a strong foundation for attracting foreign investment. The next phase should prioritize making it easier for investors to establish, operate, and expand their businesses in India. It is also essential to enhance the broader economic benefits that such investments can provide to the country.
The report highlights that FDI has become a crucial component of India’s growth, particularly in the services, manufacturing, and emerging sectors. Approximately one-third of total FDI equity inflows have originated from the services sector, including computer software and hardware. Notable investments have also been made in the automotive, pharmaceuticals, chemicals, infrastructure, electronics, and renewable energy sectors.
Dr. S.P. Sharma, Chief Economist at Assocham, noted that FDI brings not only capital but also technology, access to global markets, and international business networks. However, the tangible impact of these investments depends on how much value addition, employment, exports, technology transfer, and partnerships with Indian companies are generated.
To make FDI more effective, the report recommends several measures. These include improving aftercare services for investors, enhancing the efficiency of the single-window approval system, reducing land costs, increasing land availability, and improving logistics and utility services. Simplifying compliance procedures and strengthening access to finance are also critical.
Furthermore, the study advocates for promoting technology and research and development (R&D) based investments, developing industrial infrastructure ready for investment, and improving coordination between central and state governments.
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