During the April-June quarter in 2025, the inflows of Foreign Direct Investment (FDI) stood at more than $16 billion, compared to a lower over $9 billion in the previous March-ending quarter. Total foreign investment, which includes equity inflows from abroad, reinvested earnings and other capital was over $25 billion compared to $22.5 billion in the same period the previous fiscal.
According to an official economic backgrounder that was released on August 30, 2025, “India has rapidly emerged as a top global destination for FDI, powered by a decade of structural reforms, investor-friendly policy and rising competitiveness. Backed by improvements in global rankings and strategic initiatives, investor confidence has strengthened. India witnessed a historic $81 billion worth of foreign investments in FY 24-25 alone.”
An enthusiastic Government now targets an inflow of $100 billion annually, up from a five-year average of over $70 billion, as India positions itself as a global investment hub amid shifting supply chains. According to the backgrounder, cumulative FDI inflows were nearly `90 lakh crore between April 2000 and December 2024. Equity inflows from abroad surged by 27 per cent to `3.4 lakh crore in April-December 2024, “reflecting robust investor confidence.” It was due to reforms in key sectors, GST, and Make in India, which proved to be the main drivers for foreign investors.
As foreigners remained net purchasers for the most of the time on the Indian stock markets, domestic institutions and retail investors joined the party. Between June 16 and July 15, 2025, domestic institutions remained large net buyers, purchasing equity worth `44,000 crore. India’s foreign exchange reserves stood at $700 billion as on July 18, 2025.
“Backed by strong macroeconomic fundamentals, India’s growth journey remains in the global spotlight. While the RBI expects growth pace to continue into 2025-26, other projections echo this optimism. The United Nations has forecasted growth of 6.3 per cent in 2025, and 6.4 per cent in 2026, while the CII places its estimate slightly higher at 6.406.7 per cent,” states the backgrounder.
The IMF revised its forecast to 6.4 per cent in 2025 and 2026, and S&P Global raised India’s long-term sovereign credit rating, which came after 18 years. The rating agency felt that the country’s real GDP growth averaged 8.8 per cent between FY 22 and FY 24, the highest in the Asia Pacific region. It projects a growth of 6.5 per cent in FY 26, and 6.8 per cent over the next three years.
More importantly, the country’s employment surged, with 170 million jobs created in the past decade, reflecting the government’s focus on youth-centric policies and its Viksit Bharat vision. The backgrounder states that the labour force participation rate for those who are 15 years and above increased from less than 50 per cent to over 60 per cent in the past few years.
In the April-June 2025 quarter, agriculture engaged the majority of rural workers, and the tertiary sector was the largest source of employment in the urban areas. On average, more than 550 million were employed in the country, of which 400 million were men. Self-employment dominated rural jobs and, as expected, salaried persons were prominent in the urban areas. Unemployment rate has dipped.