Equity inflows from the US more than doubled to over $11 billion in 2025-26, as companies increasingly chose to invest directly into India rather than routing funds through tax-friendly jurisdictions used in earlier years. Singapore retained its position as the top source of FDI, recording a steady rise in investments, while Japan also saw a sharp increase driven by large deals in the financial services sector.
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Commerce and Industry Minister Piyush Goyal recently said American companies had committed investments worth around $60 billion in recent months, underscoring the growing US interest in the Indian market.
Following changes in India’s tax treaty with Mauritius, Singapore has emerged as the preferred investment conduit into India, accounting for roughly one-third of total equity inflows in the last financial year.
However, tax-efficient jurisdictions continue to play a role in global capital flows. Investments from the Cayman Islands jumped sharply from $371 million in 2024-25 to $2.1 billion last year, though officials indicated the spike may be driven by a small number of large transactions.
There has also been a shift in sectoral trends within FDI inflows. Computer hardware and software emerged as the leading recipient of foreign investment, overtaking the services sector, partly driven by rising investment in data centre infrastructure.Also Read: Exports in high growth trajectory during May: Piyush Goyal
Food processing recorded strong growth, with equity inflows rising more than fivefold, while sea transport and shipping-related activities saw an extraordinary surge of nearly 30 times, reaching close to $2 billion in 2024-25.
Goyal said the government is actively working on several measures to attract investment across sectors and strengthen domestic capabilities.
“We are continuously addressing challenges related to increasing self-reliance, particularly in areas where our supply chains are critically dependent on certain geographies,” he said.