Other BriefingsFDI in India FY 2023-24: Top State and Sector Beneficiaries
We discuss which Indian states and sectors received the most foreign direct investment (FDI) in FY 2023-24 and explain key trends observed. Overall, despite declines in comparative inflows, Maharashtra, Gujarat, and Karnataka remained top destinations while computer software & hardware and the services sectors remained top sector beneficiaries.
In the fiscal year 2023-24 (FY24), foreign direct investments (FDI) into India fell to a five-year low, recording a total inflow of US$44.4 billion. This marked a slight decline from the US$46 billion received in the previous fiscal year, influenced by global economic uncertainties and a growing trend of inward-looking capital allocation among nations.
Despite this overall dip, certain Indian states—namely Maharashtra, Gujarat, and Tamil Nadu—demonstrated resilience and growth in attracting FDI. In particular, Gujarat and Tamil Nadu benefited from their cluster-based industrial approach, covering a diverse range of sectors.
|
FDI Equity Inflow (Month-Wise) During the FY 2023-24 |
|||
|
Financial year 2023-24 |
Amount of FDI equity inflow |
||
|
April – March |
(in INR billion) |
(in US$ million) |
|
|
1. |
April, 2023 |
418.77 |
5,106 |
|
2. |
May, 2023 |
220.55 |
2,678 |
|
3. |
June, 2023 |
259.99 |
3,162 |
|
4. |
July, 2023 |
209.17 |
2,546 |
|
5. |
August, 2023 |
240.71 |
2,908 |
|
6. |
September, 2023 |
339.57 |
4,089 |
|
7. |
October, 2023 |
527.55 |
6,338 |
|
8. |
November, 2023 |
236.28 |
2,837 |
|
9. |
December, 2023 |
197.71 |
2,374 |
|
10. |
January, 2024 |
498.29 |
5,995 |
|
11. |
February, 2024 |
219.77 |
2,649 |
|
12. |
March, 2024 |
310.63 |
3,742 |
|
Cumulative from April 2023 to March 2024* |
3678.99 |
44,423 |
|
|
Cumulative from April 2022 to March 2023* |
3674.35 |
46,034 |
|
|
Percentage growth over FY 2022-23 |
(+)0.13% |
(-)3.49% |
|
|
Notes:
Source: DPIIT |
|||
Indian states attracting the most FDI in FY24
Gujarat: A leading destination for FDI
Gujarat emerged as the top performer, drawing in US$7.3 billion in fresh FDI equity inflows, representing a remarkable 55 percent year-on-year growth. This surge enabled Gujarat to surpass both Karnataka and Delhi, securing the second spot in terms of total FDI inflows for FY24. The state’s success can be attributed to significant big-ticker investments, such as Micron’s new semiconductor plant.
READ MORE: Investment Spotlight on Western India: Gujarat vs Maharashtra
Growth in Tamil Nadu and Maharashtra
Tamil Nadu and Maharashtra also recorded growth in FDI inflows, with year-on-year increases of 12 percent and 2 percent, respectively.
Tamil Nadu’s rise, despite being positioned sixth in total FDI inflows at US$2.4 billion, was driven by marquee investments in the electronics manufacturing sector, such as the expansion of Foxconn and Pegatron’s electronics manufacturing facilities.
Maharashtra’s consistent performance reflects its status as a traditionally favored destination for foreign investments in India.
READ MORE: Investing in Tamil Nadu: Manufacturing Outlook and Opportunities
Declines in FDI numbers noted for Karnataka and Delhi
In contrast, Karnataka experienced a decline in FDI inflows, which fell by 37 percent year-on-year, continuing a downward trend since FY22. This decrease is largely attributed to a slowdown in startup funding and a perceived saturation in the state’s technology ecosystem. Delhi also saw a reduction in FDI inflows, declining by 13.4 percent, placing it fourth overall for FY24.
Telangana’s FDI surge
Telangana made key strides, doubling its FDI inflows to US$3 billion, securing the fifth spot in the rankings. This 132 percent surge year-on-year was fueled by substantial investments from companies like Amazon, highlighting the state’s growing appeal to foreign investors.
|
Sectors in India Attracting the Highest FDI Equity Inflow |
|||||||
|
Rank |
Sector |
Amount in INR crore / US$ million |
2021-22 (April-March) |
2022-23 (April-March) |
2023-24 (April-March) |
Cumulative equity inflow (April 2000 – March 2024) |
Percentage out of total FDI equity inflow (in US$ terms) |
|
1. |
Maharashtra |
INR crore |
1,14,964 |
1,18,422 |
1,25,101 |
5,32,429 |
|
|
US$ million |
15,439 |
14,806 |
15,116 |
69,087 |
30% |
||
|
2. |
Karnataka |
INR crore |
1,63,795 |
83,628 |
54,427 |
3,89,483 |
|
|
US$ million |
22,072 |
10,429 |
6,571 |
51,031 |
22% |
||
|
3. |
Gujarat |
INR crore |
20,169 |
37,059 |
60,600 |
2,99,624 |
|
|
US$ million |
2,706 |
4,714 |
7,300 |
39,201 |
17% |
||
|
4. |
Delhi |
INR crore |
60,839 |
60,119 |
53,980 |
2,44,073 |
|
|
US$ million |
8,189 |
7,534 |
6,523 |
31,716 |
14% |
||
|
5. |
Tamil Nadu |
INR crore |
22,396 |
17,247 |
20,157 |
84,243 |
|
|
US$ million |
3,003 |
2,169 |
2,436 |
10,938 |
5% |
||
|
6. |
Haryana |
INR crore |
20,971 |
20,735 |
15,797 |
75,270 |
|
|
US$ million |
2,798 |
2,600 |
1,908 |
9,730 |
4% |
||
|
7. |
Telangana |
INR crore |
11,964 |
10,319 |
25,094 |
60,860 |
|
|
US$ million |
1,607 |
1,303 |
3,029 |
7,774 |
3% |
||
|
8. |
Jharkhand |
INR crore |
48 |
44 |
90 |
19,382 |
|
|
US$ million |
6 |
6 |
11 |
2,667 |
1% |
||
|
9. |
Rajasthan |
INR crore |
5,277 |
7,218 |
2,195 |
18,052 |
|
|
US$ million |
707 |
910 |
265 |
2,344 |
1% |
||
|
10. |
Uttar Pradesh |
INR crore |
1,619 |
3,373 |
2,762 |
12,615 |
|
|
US$ million |
217 |
420 |
334 |
1,635 |
1% |
||
|
(i.) FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar applied, on the basis of monthly average rate provided by RBI (DEAP), Mumbai. (ii.) Percentage worked out in US$ terms & FDI inflow received through Government Route + Automatic Route + acquisition of existing shares only. (iii.) State-wise data is maintained w.e.f. October 2019. Figures are provisional.
|
|||||||
|
Source: DPIIT |
|||||||
Sector-wise FDI trends in India
FY24 saw a varied performance across different sectors in terms of FDI distribution. While FDI inflows in the computer software and hardware sector remained the highest at US$7.9 billion, followed by the services sector at US$6.6 billion, both sectors experienced a year-on-year decline.
In contrast, the construction sector witnessed a near threefold increase in FDI inflows, showcasing its growing attractiveness to foreign investors as infrastructure projects across the country have been greenlit.
On the flip side, traditional sectors such as drugs and pharmaceuticals, chemicals, automotive, and telecom faced significant declines in FDI, with reductions of 48 percent, 54 percent, 20 percent, and 60 percent year-on-year, respectively. This shift highlights the changing priorities and challenges within India’s investment landscape.
READ MORE: Understanding India’s Manufacturing Landscape
|
Sectors in India Attracting the Highest FDI Equity Inflow |
|||||||
|
Rank |
Sector |
Amount in INR crore / US$ million |
2021-22 (April-March) |
2022-23 (April-March) |
2023-24 (April-March) |
Cumulative equity inflow (April 2000 – March 2024) |
Percentage out of total FDI equity inflow (in US$ terms) |
|
1. |
Services sector |
INR crore |
53,165 |
69,852 |
54,894 |
6,86,879 |
|
|
US$ million |
7,131 |
8,707 |
6,640 |
109,496 |
16% |
||
|
2. |
Computer software and hardware |
INR crore |
1,07,762 |
74,718 |
66,090 |
7,18,869 |
|
|
US$ million |
14,461 |
9,394 |
7,973 |
102,884 |
15% |
||
|
3. |
Trading |
INR crore |
33,779 |
38,060 |
32,080 |
2,99,259 |
|
|
US$ million |
4,538 |
4,792 |
3,865 |
43,396 |
6% |
||
|
4. |
Telecommunications |
INR crore |
4,980 |
5,469 |
2,318 |
2,34,840 |
|
|
US$ million |
668 |
713 |
282 |
39,326 |
6% |
||
|
5. |
Automobile industry |
INR crore |
51,624 |
15,184 |
12,622 |
2,35,287 |
|
|
US$ million |
6,994 |
1,902 |
1,524 |
36,268 |
5% |
||
|
6. |
Construction (Infrastructure activities) |
INR crore |
24,178 |
13,588 |
35,076 |
2,39,554 |
|
|
US$ million |
3,248 |
1,703 |
4,232 |
33,918 |
5% |
||
|
7. |
Construction development |
INR crore |
932 |
1,196 |
2,113 |
1,31,321 |
|
|
US$ million |
125 |
146 |
255 |
26,611 |
4% |
||
|
8. |
Drugs and pharmaceuticals |
INR crore |
10,552 |
16,654 |
8,844 |
1,34,881 |
|
|
US$ million |
1,414 |
2,058 |
1,064 |
22,528 |
3% |
||
|
9. |
Chemicals (other than fertilizers) |
INR crore |
7,202 |
14,662 |
6,985 |
1,33,704 |
|
|
US$ million |
966 |
1,850 |
844 |
22,146 |
3% |
||
|
10. |
Power |
INR crore |
3,904 |
5,483 |
14,141 |
1,08,997 |
|
|
US$ million |
526 |
698 |
1,701 |
18,287 |
3% |
||
|
(i) ** Services sector includes financial, banking, insurance, non-financial / business, outsourcing, R&D, courier, technology testing and analysis, other. (ii) FEDAI (Foreign Exchange Dealers Association of India) conversion rate from rupees to US dollar applied, on the basis of monthly average rate provided by the Reserve Bank of India (RBI) (DEAP), Mumbai. (iii) Percentage worked out in US$ terms & FDI inflow received through Government Route + Automatic Route + acquisition of existing shares only. (iv) FDI sectoral data has been revalidated / reconciled in line with the RBI, which may reflect minor changes in the FDI figures (increase/decrease) as compared to the earlier published sectoral data. (v) Figures are provisional. |
|||||||
|
Source: DPIIT |
|||||||
Key contributors to FDI inflows into India
When tracking for cumulative FDI inflows into India from fiscal years 2000 to 2024, Mauritius, Singapore, USA, Netherlands, and Japan remain the top five contributors. In FY24, Singapore emerged as the largest contributor, accounting for US$11.7 billion of the total FDI inflows.
|
Share of Top Investing Countries FDI Equity Inflow |
|||||||
|
Rank |
Country |
Amount in INR crore and US$ million |
2021-22 (April – March) |
2022-23 (April – March) |
2023-24 (April – March) |
Cumulative equity inflow * (April 2000 – March 2024) |
Percentage of total FDI equity inflow (in US$ terms) |
|
1. |
Mauritius |
INR crore |
69,945 |
48,895 |
66,147 |
10,22,589 |
|
|
US$ million |
9,392 |
6,134 |
7,970 |
171,847 |
25% |
||
|
2. |
Singapore |
INR crore |
1,18,235 |
1,37,374 |
97,475 |
10,91,873 |
|
|
|
US$ million |
15,878 |
17,203 |
11,774 |
159,943 |
24% |
|
|
3. |
USA |
INR crore |
78,527 |
48,666 |
41,403 |
4,47,317 |
|
|
|
US$ million |
10,549 |
6,044 |
4,998 |
65,194 |
10% |
|
|
4. |
Netherlands |
INR crore |
34,442 |
19,855 |
40,733 |
3,24,182 |
|
|
|
US$ million |
4,620 |
2,498 |
4,924 |
48,683 |
7% |
|
|
5. |
Japan |
INR crore |
11,187 |
14,328 |
26,243 |
2,62,304 |
|
|
|
US$ million |
1,494 |
1,798 |
3,177 |
41,918 |
6% |
|
|
6. |
United Kingdom |
INR crore |
12,283 |
13,994 |
10,061 |
2,03,296 |
|
|
|
US$ million |
1,657 |
1,738 |
1,216 |
35,091 |
5% |
|
|
7. |
UAE |
INR crore |
7,699 |
26,315 |
24,262 |
1,31,220 |
|
|
|
US$ million |
1,032 |
3,353 |
2,924 |
18,502 |
3% |
|
|
8. |
Cayman Islands |
INR crore |
28,383 |
6,069 |
2,835 |
1,07,914 |
|
|
|
US$ million |
3,818 |
772 |
342 |
15,266 |
2% |
|
|
9. |
Germany |
INR crore |
5,421 |
4,417 |
4,181 |
87,874 |
|
|
|
US$ million |
728 |
547 |
505 |
14,643 |
2% |
|
|
10. |
Cyprus |
INR crore |
1,735 |
10,184 |
6,705 |
79,456 |
|
|
|
US$ million |
233 |
1,277 |
806 |
13,450 |
2% |
|
|
Total FDI equity inflow from all countries |
INR crore |
4,37,188 |
3,67,435 |
3,67,899 |
43,47,001 |
|
|
|
US$ million |
58,773 |
46,034 |
44,423 |
678,864 |
|
||
|
Notes:
Source: DPIIT |
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