India Records $94.53 Billion FDI in FY2025-26

India recorded its highest-ever annual foreign direct investment (FDI) inflow of USD 94.53 billion in FY2025-26, taking cumulative FDI inflows from FY2014-15 to FY2025-26 to USD 843 billion, Commerce and Industry Minister Piyush Goyal said on September 25 as the country marked the 12th anniversary of the Make in India initiative. The record comes alongside a broader policy push to convert foreign capital into manufacturing capacity, domestic value addition, exports and global supply-chain participation.

Goyal said the Production Linked Incentive (PLI) schemes had resulted in ₹2.40 lakh crore of actual investment, ₹23.8 lakh crore in production and sales and ₹15.2 lakh crore in exports as of March 31, 2026. The schemes have also generated more than 14.6 lakh direct and indirect jobs, with electronics and telecom, pharmaceuticals, medical devices, automobiles, IT hardware and speciality steel among the major beneficiaries.

PLI, with an approved outlay of about ₹1.91 lakh crore across 14 sectors, was designed to reward incremental production and sales rather than simply subsidising inputs. By March 2026, 836 applications had been approved. The programme has increasingly attracted multinational manufacturers, although the ₹2.40 lakh crore investment figure includes both Indian and foreign companies.

Electronics manufacturing provides one of the clearest links between FDI and PLI. India received USD 4.071 billion in electronics-manufacturing FDI between FY2020-21 and FY2024-25, with USD 2.802 billion, or about 69 per cent, coming from PLI beneficiaries. The sector has expanded sharply, with electronics production rising from ₹1.9 lakh crore in FY2014-15 to around ₹12 lakh crore in FY2024-25, while electronics exports rose from ₹38,000 crore to about ₹3.3 lakh crore.

However, higher production does not automatically mean complete localisation. Domestic value addition in electronics remains around 18-20 per cent, highlighting India's continued dependence on imported components and technology. The next phase of policy is therefore focused on components and deeper supply chains rather than assembly alone.

The PLI strategy has also expanded domestic capacity in pharmaceuticals, automobiles, specialty steel, solar modules and other sectors. Pharmaceutical PLI has supported domestic production of 1,931 products, including 191 bulk drugs manufactured in India for the first time. By March 2026, PLI investment included ₹64,873 crore in solar PV, ₹45,158 crore in pharmaceuticals, ₹44,326 crore in automobiles and auto components, ₹23,896 crore in specialty steel and ₹20,580 crore in electronics.

PLI-linked exports reached ₹15.2 lakh crore, but India's overall merchandise exports were USD 441.78 billion against imports of USD 774.98 billion in FY2025-26. This underscores the remaining import dependence on energy, components and capital goods.

The larger policy objective is therefore shifting from simply attracting foreign money to ensuring that FDI creates factories, domestic value addition, jobs and export capacity. With industrial corridors, Ease of Doing Business reforms and more than 470 crore ONDC orders, India is attempting to connect investment with a broader manufacturing ecosystem.

The record FDI figure marks progress, but the longer-term test will be whether India can convert foreign capital into deeper domestic production, higher value addition and globally competitive exports.