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India's FDI Hits $90.8 Billion, Services Sector Leads Surge: Morgan Stanley

Gross foreign direct investment flows to India accelerated to $90.8 billion on a trailing 12-month basis, marking a 13% increase from the previous year. The services sector continues to dominate these inflows, accounting for nearly half of the total share, while manufacturing has diversified into autos and electronics. However, net FDI remains constrained near historic lows due to increasing repatriation and outward investment. Analysts anticipate the positive trend in gross FDI will sustain, though flows are expected to remain lumpy and dependent on global conditions.

Key Points: India's Gross FDI Rises to $90.8 Billion, Services Lead

  • Gross FDI hits $90.8B, up 13%
  • Services sector dominates with 46% share
  • Net FDI remains near all-time low at $0.5B
  • India's global FDI share rises to 2.4%
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Gross FDI flows to India accelerate to $90.8 billion, services sector dominates: Morgan Stanley

Morgan Stanley reports India's gross FDI accelerated to $90.8 billion, with services dominating inflows, though net FDI remains low.

"Currently, the gross FDI pipeline has been balanced by both greenfield projects... and brownfield projects - Morgan Stanley report"

New Delhi, April 23

Gross FDI flows to India accelerated to $90.8 billion in January 2026 on a on a 12-month trailing basis, up by a healthy 13 per cent from $80.3 billion in January 2025, a Morgan Stanley report showed on Thursday.

Gross FDI (ex repatriation) improved to a three-year high of $36.3 billion in January 26, rising 38.4 per cent on-year. The trend in gross FDI has recovered steadily since January 2024, underpinned by strong macroeconomic fundamentals and improving depth of its domestic demand.

"Currently, the gross FDI pipeline has been balanced by both greenfield projects (primarily in the IT and banking sectors) and brownfield projects via higher stakes of foreign companies in existing Indian ventures or via joint ventures as well as mergers and acquisitions (financial sector and startups)," the report noted.

According to the report, services sector continues to dominate FDI flows, accounting for 46 per cent of share, while flows within manufacturing, one-quarter of total flows, have diversified to sectors such as autos and electronics, supported by policy impetus.

India's market share in global FDI edged up to 2.4 per cent in 2025, a tad below its five-year average of 2.6 per cent. Similarly, India's share in FDI-related flows to Asia climbed up by 200bp to 6.4 per cent, higher than its five year average at 5.7 per cent.

However, net FDI remains near all-time low, tracking at $0.5 billion in January 2026, on a 12-month trailing basis, constrained by increasing incidence of repatriation and outward FDI.

Morgan Stanley analysts said that improving strength in gross FDI is encouraging at the margin, and is likely to remain well-supported, aided by a combination of both greenfield and brownfield investment.

"We anticipate the trend to sustain, albeit with the magnitude of flows likely to remain lumpy and deal-driven, and would remain contingent on both domestic and global growth as well as financial conditions. The trend in net FDI remains crucial from an external balance sheet perspective, as FDI is typically a more stable source of financing for the current account," they noted.

- IANS

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Reader Comments

P
Priya S
Great to see the recovery since 2024. However, the net FDI being near an all-time low at just $0.5 billion is a bit worrying. High repatriation means the actual long-term investment staying in the country is much less. We need policies to encourage reinvestment.
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Rohit P
The growth in electronics manufacturing FDI is the real story here. With companies looking beyond China, India has a golden chance to become a global hub. Hope the infrastructure and skilled workforce keep pace with this investment flow.
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Sarah B
As someone working in the IT sector, the mention of greenfield projects in IT is very encouraging. This should translate into more high-quality jobs and technology transfer. The deal-driven nature means we have to stay competitive globally.
K
Karthik V
The report is balanced. While gross FDI is up, the analysts rightly point out it's "lumpy and deal-driven." We can't get complacent. Global financial conditions can change quickly. Need consistent policy support to make this trend sustainable for the long run.
M
Meera T
Heartening to see the numbers. But I hope this investment translates to development on the ground in smaller cities too, not just metros. Balanced regional growth is key. Also, more focus needed on sectors like renewable energy and agriculture tech.

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