India Crosses $1 Trillion FDI Threshold: A Green Investment Magnet
- Muhammad Ahmad
- Dec 13, 2024
- 2 min read
India attracts record foreign investment driven by sustainability goals and policy reforms
India emerges as a key destination for greenfield investments
India has surpassed $1 trillion in cumulative FDI since 2000, with $709.84 billion received since 2014.
Government policies, including the National Action Plan for Climate Change and Green Energy Corridor, support green investments.
Opportunities exist for foreign investors in renewable energy, waste management, and sustainable infrastructure projects.
India has achieved a significant milestone, attracting over $1 trillion in cumulative Foreign Direct Investment (FDI) since April 2000. A substantial portion of this, nearly 70%, has flowed into the country since 2014, highlighting India’s increasing prominence in the global economy.
This growth is further underscored by a 26% year-on-year increase in FDI inflows, reaching $42.1 billion in the fiscal year's first half. The government's focus on ease of doing business and targeted policy reforms have played a crucial role in attracting this investment.
This milestone signifies growing global confidence in India's economic potential and commitment to sustainable development. The influx of FDI is expected to fuel economic growth, create jobs, and drive innovation across various sectors, including manufacturing, services, and infrastructure. India's improved rankings in global indices, such as the World Competitiveness Index and the Global Innovation Index, further reinforce its attractiveness as an investment destination.
Technical Focus
India's renewable energy sector presents a significant opportunity for foreign investors. The government's ambitious targets, including achieving 450 GW of renewable energy capacity by 2030, have created a favourable environment for investment.
Initiatives such as the National Solar Mission, Renewable Purchase Obligation (RPO), and the Green Energy Corridor are driving growth in the sector. The government allows 100% FDI in renewable energy projects through the automatic route and has waived interstate transmission charges for solar and wind power.
This, combined with declining renewable energy tariffs and the emergence of green energy trading platforms, provides a compelling case for foreign investment in India's green energy future. The waste management sector also offers significant potential, with a projected market size of $35.87 billion by 2028.
"India's traditional journey is transitioning well with its ambitious sustainability goals. On this green path, green finance and foreign investments drive the nation toward a greener economy and open a vast landscape for the future." - Invest India.
India's commitment to sustainable development and investor-friendly policies position it as a prime destination for foreign capital. The government's proactive approach to streamlining regulations, reducing corporate tax rates, and promoting sectors like renewable energy and waste management has created a fertile ground for sustainable FDI.