India’s FDI Champions: Top Five States Lead Investment Race

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As India crosses the $1 trillion FDI milestone, Maharashtra, Karnataka, Gujarat, Delhi, and Tamil Nadu emerge as the top magnets for global capital.

By PRADEEP KUMAR PANDA

BHUBANESWAR, June 10, 2025 — India has achieved a major milestone in its economic journey, with cumulative foreign direct investment (FDI) inflows surpassing the $1 trillion mark since April 2000. For the financial year 2024–25, FDI inflows touched $40.67 billion by December 2024—a robust 27% increase over the same period in the previous year, reflecting sustained global investor confidence in India’s growth trajectory.

According to the United Nations Conference on Trade and Development’s (UNCTAD) World Investment Report 2024, India ranked second globally in international project finance deals, with 1,058 greenfield project announcements and 163 such deals—a clear sign of India’s expanding role as a hub for global capital.

India’s strategy of infrastructure-led growth, digital transformation, and investor-friendly policies continues to attract foreign capital across diverse sectors. But which states are leading this investment surge? From industrial giants to tech hubs, these top five Indian states are redefining the FDI narrative in FY 2025:

Maharashtra

FDI Inflow: $16.65 Billion
Maintaining its top position, Maharashtra accounted for a staggering 31% of India’s total FDI equity inflows in FY 2025 (till December 2024). Its robust industrial base, dedicated sectoral infrastructure, investor-friendly policies, and a highly employable workforce (70%) have made it the prime destination for foreign investors. With a strong presence in sectors like automobiles, defence manufacturing, textiles, IT-BPM, and food processing, Maharashtra continues to champion the Make in India initiative.

Karnataka

FDI Inflow: $4.50 Billion
Karnataka, home to India’s thriving tech and startup ecosystems, attracted 20% of the country’s total FDI inflows. The state benefits from strong economic fundamentals, increasing consumer demand, effective governance, and a pro-business climate. Major investors from Mauritius (25%), Singapore (24%), and the U.S. (10%) are backing sectors such as IT, telecom, and services, reinforcing Karnataka’s position as a global innovation hub.

Gujarat

FDI Inflow: $5.57 Billion
Gujarat secured third place with $5.57 billion in FDI inflows. Known for its pro-business policies and world-class infrastructure, the state also leads in exports—contributing around 31% of India’s total merchandise exports in FY 2023–24. Key sectors driving investments include textiles, ESDM (Electronics System Design & Manufacturing), food processing, ports, and IT-BPM. Gujarat continues to convert investment potential into high-impact outcomes.

Delhi (NCR)

FDI Inflow: $4.45 Billion
The National Capital Region, including Delhi, drew significant investor attention, thanks to its strategic location, strong infrastructure, policy clarity, and innovation-driven ecosystem. Key sectors such as manufacturing, IT-BPM, tourism, and healthcare played a crucial role in attracting FDI. Delhi’s seamless connectivity and administrative efficiency make it a natural magnet for global capital.

Tamil Nadu

FDI Inflow: $2.90 Billion
Tamil Nadu rounded off the top five with $2.9 billion in FDI equity inflows. Known for its high Credit-Deposit Ratio (CDR), the state reflects a high level of economic activity. Tamil Nadu’s 2023–2030 climate action plan—focusing on emissions reduction, sustainable agriculture, and water management—adds to its appeal as a forward-thinking investment destination. The state’s combination of economic strength, progressive governance, and sustainability-focused policies makes it a compelling choice for investors.

India’s liberalised FDI policy, allowing 100% foreign investment under the automatic route in most sectors, continues to be a major draw for global investors. Currently, nearly 90% of FDI inflows are routed through this automatic mechanism, underscoring the ease of doing business in the country.

As these five states lead the way, India’s FDI landscape remains dynamic—shaped by regional strengths, infrastructure upgrades, and sector-specific incentives. Together, they are not just attracting capital but also transforming India into a resilient, future-ready economy.

(This is an opinion piece; views expressed solely belong to the author)

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