Recording an impressive $81.04 billion FDI inflow in FY 2024–25, the country has not only surpassed expectations but also showcased its strategic evolution as a global hub for industrial growth and technological innovation.

This surge in FDI underlines India’s growing reputation as a stable, scalable, and sustainable destination for international businesses looking to establish long-term manufacturing bases.

A magnet for global capital

The record-breaking FDI figures for FY 2024–25 stand as a testament to the confidence global investors have in India’s economic fundamentals, governance reforms, and robust policy environment.

These inflows have poured in across a diverse range of sectors, with manufacturing leading the charge.

The Make in India initiative, launched in 2014, has matured into a driving force behind this momentum.

With focused support from both the central and state governments, India’s manufacturing ecosystem now boasts modern infrastructure, streamlined regulations, and a tech-savvy workforce that appeals to both legacy manufacturers and next-generation industries.

Strategic policy support driving growth

At the heart of India’s FDI success story lies proactive policymaking and structural reforms aimed at making it easier to do business.

The government has liberalised FDI norms across multiple manufacturing sectors, allowing for 100% foreign ownership in many areas through the automatic route.

Alongside this, the introduction of the Production Linked Incentive (PLI) schemes has proven to be a game-changer.

These schemes provide performance-based incentives to boost domestic manufacturing and attract major global players.

Key beneficiaries of the PLI scheme include sectors such as electronics, pharmaceuticals, automobiles, textiles, and renewable energy—each witnessing substantial foreign investments.

Global giants like Apple, Samsung, Tesla, Foxconn, Siemens, Boeing, and Intel are increasingly choosing India not only as a manufacturing base but also as a regional hub for research, development, and supply chain innovation.

A rising electronics and semiconductor hub

India’s electronics manufacturing sector has emerged as a symbol of the country’s industrial rise.

With FDI investments flowing into mobile handset production, semiconductor fabrication, and consumer electronics, India is positioning itself as an alternative to traditional manufacturing giants like China and Vietnam.

Cities such as Noida, Bengaluru, Hyderabad, and Chennai are becoming bustling centres of electronics production, supported by government-approved electronics clusters and world-class logistics parks.

Semiconductors, in particular, are attracting high-profile attention.

With global chip shortages prompting countries to diversify production lines, India has presented itself as a viable solution.

Massive FDI commitments from firms such as Micron Technology, AMD, and Tata-TSMC joint ventures are now laying the foundation for India’s entrance into the highly lucrative global chip market.

Automotive and EV manufacturing accelerates

Another sector witnessing robust foreign capital infusion is the automotive industry.

India is currently the third-largest automobile market in the world and is rapidly becoming a hotbed for electric vehicle (EV) manufacturing. Multinational auto majors like Hyundai, Kia, Mercedes-Benz, Toyota, and MG Motor are not only expanding their manufacturing units in India but are also introducing EV-specific assembly lines and R&D labs.

With a strong push from the government on EV adoption and charging infrastructure, India is poised to become one of the largest EV manufacturing ecosystems globally.

Pharmaceutical and life sciences leadership

India’s pharmaceutical sector continues to attract sustained foreign investment, owing to its strong R&D capabilities, affordable manufacturing costs, and global regulatory compliance.

The country is known as the "Pharmacy of the World," supplying over 50% of global vaccine demand and a significant portion of generic drug exports.

FDI in this space is increasingly directed towards setting up formulation units, biotech labs, and active pharmaceutical ingredient (API) parks.

Multinational firms such as Pfizer, Novartis, GSK, and Sanofi are not only expanding their presence in India but are also using Indian manufacturing bases to serve emerging markets across Africa, Southeast Asia, and Latin America.

Infrastructure and logistics – The backbone of manufacturing

A key driver of India’s emergence as an FDI magnet is its massive investment in infrastructure and logistics.

The government’s PM Gati Shakti National Master Plan, which integrates road, rail, port, and air connectivity into a unified logistics grid, is dramatically improving the ease of transporting goods and raw materials.

Industrial corridors such as the Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bengaluru Industrial Corridor (CBIC), and Eastern Dedicated Freight Corridor have transformed manufacturing zones into global-standard industrial clusters.

These corridors are equipped with plug-and-play facilities, smart utilities, and seamless connectivity, making it easier for foreign companies to set up and operate efficiently.

Skilled workforce and digital transformation

India’s demographic dividend is another compelling reason for rising FDI in manufacturing.

With more than 500 million people in the working-age group and a steady stream of STEM graduates, India offers a vast and trainable workforce ready to support high-tech manufacturing.

Further, digitalisation has become a cornerstone of India’s manufacturing evolution.

With the widespread adoption of Industry 4.0 technologies like AI, IoT, robotics, and automation, Indian factories are moving up the value chain.

This digital-first approach has been instrumental in attracting advanced manufacturing FDI in aerospace, defence production, medical devices, and smart machinery.

Green manufacturing and sustainability

India’s commitment to sustainability is another attractive factor for foreign investors.

Green energy initiatives and commitments to achieving net-zero emissions by 2070 are being actively integrated into industrial policy.

Foreign companies are increasingly investing in clean-tech manufacturing, including solar panels, wind turbines, and green hydrogen technologies.

States like Gujarat, Tamil Nadu, Maharashtra, and Andhra Pradesh are offering tailored policies and incentives to attract FDI in sustainable industries, encouraging foreign players to set up eco-friendly factories that align with global environmental standards.

A global manufacturing future

The record $81.04 billion FDI inflow in FY 2024–25 marks a significant milestone in India's economic journey.

It is not just a number—it is a clear signal that the world is looking at India not just as a market, but as a critical player in the global manufacturing value chain.

From smartphones and semiconductors to cars, pharmaceuticals, and clean energy equipment, India is emerging as the workshop of the world.

With stable governance, investor-friendly reforms, futuristic infrastructure, and a young, skilled workforce, the country is building a solid foundation for manufacturing-led growth that promises prosperity, employment, and innovation.

As the world seeks resilience, diversification, and sustainability in supply chains, India is stepping up—not as an alternative, but as a preferred destination. The future of global manufacturing, it seems, has found a new home.