Investor sentiment towards India as an FDI destination reaches new high: Report

Investor sentiment towards India has reached a new high, with the country identified as a strategic growth market by the seventh wave of Bloomberg Media’s Global Foreign Direct Investment Outlook. According to the survey of 2,600 senior business decision-makers spanning 31 key markets, 93 per cent of investors considering India rated their interest as high, while 61 per cent noted that ongoing trade tensions have enhanced their trust in India as a preferred foreign direct investment (FDI) destination.

The main motivations for FDI in India are the nation's economic growth potential (32 per cent), its youthful and expanding workforce (26 per cent), and the size of its domestic market (26 per cent). Technology and innovation are also significant drivers, with 22 per cent of investors citing the technology sector and 20 per cent referencing digital transformation as key factors. Over half (54 per cent) of India-focused investors prioritise the advanced technology sector for future investment, with 45 per cent focusing on IT and computer technology – 13 per cent more than those targeting the Asia-Pacific region overall.

India-focused investors strongly favour skilled engineering talent for manufacturing (84 per cent), regional peace and security (84 per cent), and policy consistency (83 per cent) as leading factors in their investment decisions. Corporate tax policy, access to finance, and FDI incentives each hold importance for 77 per cent of respondents. Expansion priorities include entering new territories (61 per cent), developing local supply chains (50 per cent), constructing new commercial facilities (43 per cent), and expanding manufacturing capabilities (43 per cent), reflecting robust long-term investor confidence.

Delhi (69 per cent) and Maharashtra (58 per cent) have emerged as the leading regions for FDI interest, with southern states Karnataka (26 per cent) and Tamil Nadu (23 per cent) also drawing notable attention, and Punjab registering a relatively high consideration at 28 per cent. The study findings align with broader economic projections, with India positioned to become the world's third-largest economy by 2028, according to the International Monetary Fund.

Michelle Lynn, Global Head of Data and Insights at Bloomberg Media, commented: "Rising investor confidence and strong FDI interest in India underscores the country’s growing importance as a strategic global investment destination. As global investors recalibrate their strategies in response to geopolitical and economic volatility, India’s strong market potential, youthful workforce, and robust industry growth are increasingly seen as key advantages in long-term investment planning."

She continued, "Our study shows investors view India as a stable, innovative, and scalable market for future growth. Investor confidence is reflected in global FDI trends, fuelled by India’s fast-growing domestic market, its deep pool of skilled talent, and its leadership in technology and manufacturing."

As Lynn stated, "India’s FDI appeal is rooted more in its long-term potential which goes beyond short-term opportunity. Our respondents’ sentiment clearly aligns with this outlook, with many investors actively positioning themselves to grow with the market."