India moves a rung up to rank 15th among top FDI destinations in 2024

India Rises in Global FDI Confidence Index

India has moved up one spot to rank 15th in the 2024 edition of the Kearney Foreign Direct Investment (FDI) Confidence Index, underscoring growing investor optimism in the country’s economic potential and reform trajectory. The annual survey, which gauges the sentiment of global executives at leading corporations, highlighted India's consistent improvements in ease of doing business, digital infrastructure, and domestic consumption.

This marks a steady upward movement for the country in an otherwise volatile global investment environment, positioning India firmly among the top 20 most attractive destinations for foreign investment.

Steady Progress Amid Global Uncertainty

The rise comes amid a backdrop of global geopolitical tensions, inflationary pressures, and tightening financial conditions in the West. Despite these challenges, multinational corporations continue to view India as a resilient and promising investment destination, driven by its strong macroeconomic fundamentals, large consumer market, and reform-oriented policies.

“In a year when many emerging markets have seen volatility deter investors, India’s movement up the ranks reflects confidence in the Modi 3.0 government's continuity, digital transformation agenda, and supply chain resilience efforts,” said Rohit Shah, partner at Mumbai-based global consulting firm Bridgefield & Co.

Key Sectors Driving Interest

Foreign investors have increasingly focused on sectors such as renewable energy, digital services, manufacturing, electric mobility, and pharmaceuticals. India’s production-linked incentive (PLI) schemes, aimed at boosting domestic manufacturing and exports, have played a central role in attracting long-term capital flows.

Notably, the technology and digital infrastructure ecosystem has become a magnet for investment, with global tech giants and venture capital firms continuing to pour funds into startups and digital enablers.

“The digital public infrastructure push under India Stack, along with UPI’s global outreach, is making India a uniquely scalable platform economy,” said Meera Nambiar, FDI strategist at AsiaBridge Advisory. “This offers foreign investors a sandbox for innovation at scale.”

Government’s Role and Reform Path

India’s government has been actively working to make the country more investor-friendly. Recent measures include:

• Simplified compliance processes through digitization.

• Land and labour reforms in key industrial states.

• Liberalized FDI norms in sectors such as defence and space tech.

• Tax incentives for foreign firms setting up R&D or regional hubs.

These steps are aligned with the broader vision of making India a $5 trillion economy, with an emphasis on becoming a global manufacturing and supply chain hub.

Comparative Perspective

While India moved to 15th place, the United States retained the top spot, followed by Canada, Germany, and Japan. Among emerging markets, India remains the highest-ranked Asian country, surpassing regional peers like Vietnam, Malaysia, and Indonesia.

The report attributes India’s improved ranking to its demographic dividend, fast-growing middle class, and strategic investments in infrastructure.

FDI Flow Trends and Numbers

According to the Department for Promotion of Industry and Internal Trade (DPIIT), India received $71 billion in FDI inflows in FY24 (provisional), slightly lower than FY23 but in line with global contraction trends. Nevertheless, inflows into high-priority sectors like semiconductors, clean energy, and financial technology have risen significantly.

“We see a qualitative shift in the nature of investments — more technology-intensive and greenfield FDI, rather than short-term capital flows,” said Rajat Bansal, head of FDI Research at IndiaThink Analytics.

Investor Outlook: Cautious Optimism

Investors are generally optimistic about India’s medium- to long-term prospects, but several cautionary factors remain, including:

• Land acquisition hurdles

• Judicial delays

• Policy implementation gaps at the state level

However, most analysts agree these issues are not dealbreakers but areas for continuous improvement.

“India remains a work-in-progress story, but the direction is unmistakably upward,” noted Elena Gorsky, an investment advisor at Swiss-based GlobalView Capital. “For investors with a 5- to 10-year horizon, India offers scale, speed, and stability that are hard to find elsewhere.”

A Growing Global Magnet

India’s rise to the 15th position in the 2024 FDI Confidence Index is more than symbolic—it sends a clear message to global investors that the country is serious about structural reforms, digital enablement, and economic inclusivity. While challenges persist, the long-term fundamentals remain robust.

With the 2024 general elections reaffirming political continuity and policy stability, and with further reforms anticipated in areas like energy transition and AI regulation, India is poised to attract even greater FDI in the coming years.