India Sees FDI Equity Inflows Surge 18% in FY26 as US Investments Double

Robust capital inflows into key sectors like technology and services have driven a significant uptick in foreign investment, signaling strong global confidence in the Indian market.

Foreign direct investment into India experienced a notable expansion during the 2025-26 fiscal year, with equity inflows climbing 18% to reach $58.84 billion. Data released by the Department for Promotion of Industry and Internal Trade highlights this growth, which was anchored by a substantial doubling of contributions from the United States. While the previous fiscal year saw equity inflows of $50 billion, the latest figures reflect a broader strengthening of India's position as a preferred destination for global capital.

A Growing Partnership with the US

The most striking trend in the latest data is the performance of American investors. Inflows from the US surged to $11.17 billion in FY26, a sharp increase from the $5.45 billion recorded in the prior year. This trend underscores a deepening financial relationship between the two nations, as American firms increasingly prioritize long-term commitments within the Indian market. Beyond equity, when accounting for reinvested earnings and other forms of capital, total foreign investment in India reached $94.5 billion, marking a 17% increase over the previous year.

Top Sources and Regional Leaders

Singapore continues to lead as the primary source of foreign capital for the country, contributing $19.8 billion throughout the period. The US remains the second-largest contributor, followed by Mauritius at $6.57 billion, Japan at $3.74 billion, and the Netherlands at $3.37 billion. On a regional level, Maharashtra emerged as the top recipient state, securing $18.41 billion in investment. Karnataka followed with $12.93 billion, while Gujarat attracted $5.71 billion, showcasing the geographical diversity of this capital distribution.

Sectoral Performance Trends

The technology and infrastructure sectors remained the primary magnets for foreign interest. Between April and December of FY26, the computer software and hardware industry attracted $13.94 billion in investment. This was followed by the services sector, which drew $10 billion, and the trading sector at $4 billion. Additionally, the non-conventional energy sector—covering solar, wind, and green hydrogen projects—received $3 billion, reflecting a sustained global focus on India’s transition toward sustainable power.

Sustained Quarterly Momentum

The final quarter of FY26 maintained this momentum, with the country receiving $10.97 billion in equity inflows. When broader metrics including reinvested earnings are factored in, the total for the final quarter reached $20.8 billion. This consistent inflow suggests that investors are not merely deploying fresh capital but are also choosing to retain and reinvest their existing earnings within the domestic economy, a clear indicator of long-term confidence in India’s industrial and technological trajectory.