Source: ET
Context: Maharashtra and Karnataka together attracted 51% of India’s total FDI inflows in FY 2024–25, while Delhi’s share fell sharply from 32% in 2015–16 to just 12% in 2024–25.
About India’s FDI inflows in FY 2024–25:
- What is FDI?
-
- Foreign Direct Investment (FDI) refers to cross-border investments where foreign entities invest in and control business operations in another country.
- In India, FDI is a key non-debt financial resource for economic development, regulated by DPIIT under automatic and government routes.
- Key FDI Trends in FY 2024–25:
-
- Total FDI inflows stood at $81.04 billion, registering a 14% growth, the highest in three years.
- Maharashtra topped with $19.6 billion (31%), followed by Karnataka with $6.62 billion (20%).
- Delhi, once the top FDI destination (32% in 2015–16), saw its share drop to 12% ($6 billion).
- Gujarat’s share rose from 6% to 11%, while Tamil Nadu’s share declined from 11% to 7%.
- Experts cite improved infrastructure, policy stability, and mature industrial ecosystems in Maharashtra and Karnataka as key factors behind investor shift.
Relevance to UPSC Syllabus:
- GS Paper 3 (Indian Economy): FDI trends illustrate capital flow dynamics, ease of doing business, infrastructure development, and investment climate.
- GS Paper 2 (Governance): Reflects impact of federal policies and centre–state coordination in attracting investments.
- Essay & Interview: Useful for topics on economic reforms, urbanisation, and regional development disparities.
