India has emerged as a global investment powerhouse in 2025, recording a staggering 73% surge in foreign direct investment (FDI), reaching $47 billion, according to the latest UNCTAD report. This remarkable growth outpaces many economies and underscores the nation’s appeal amid shifting global dynamics.
The United Nations Conference on Trade and Development (UNCTAD) attributes this boom primarily to massive inflows into the services sector, including financial services, IT, and research & development. Manufacturing has also seen significant upticks, bolstered by government policies integrating India into global supply chains.
In the first three quarters of 2025, India attracted $7 billion in data center investments, securing the seventh spot globally. The fourth quarter witnessed an explosive rally, fueled by tech giants. Google announced a $15 billion commitment for an AI hub in Andhra Pradesh in October, followed by Microsoft’s $17.5 billion pledge in December for AI, cloud infrastructure, and data centers. Amazon joined the fray with a $35 billion investment across AI and related fields.
These investments, set to unfold over coming years, highlight India’s pivot towards digital infrastructure. Globally, FDI rose 14% to $1.6 trillion, with data centers driving nearly 20% of new project values. AI infrastructure demand propelled announcements beyond $270 billion, while semiconductors saw 35% growth in project values.
However, tariff-impacted sectors like textiles, electronics, and machinery faced a 25% drop in projects. Developed nations captured the lion’s share, with FDI jumping 43% to $728 billion, while developing economies saw a 2% dip to $877 billion—India standing out as a rare exception. China experienced an eighth consecutive decline, down 8% to $107.5 billion.
UNCTAD warns that despite headline gains, investor confidence remains fragile. International M&A values fell 10%, project finance dropped 16% in value and 12% in deals, and greenfield announcements declined 16%. Policymakers must prioritize real investments over mere capital flows to sustain momentum.