The Indian economy is having its moment in the spotlight, with foreign direct investments (FDI) inflows crossing the $1 trillion mark since April 2000. A watershed moment in India's growth story and a testimony to the investor confidence in the country's limitless potential and global appeal.1 Encouragingly, FDI has exceeded $40.6 billion2 in the during April – December 2024, further solidifying India's growth trajectory.
Global investor interest illustrates both the resilience of India's economy and its growing appeal as a growth hub. However, it raises an important question: which sectors are capturing the lion's share of increasing investment interest? Here are the five industries that attract the most foreign investment.
Fintech and BFSI services
India's financial services sector continues to impress investors with its growth trajectory, buoyed by a massive consumer base, high digital adoption and a robust financial environment. The government's Enhanced Access and Service Excellence (EASE) reforms,3 aimed at enhancing banking processes across the country, are playing a pivotal role in this growth, fostering digital customer experiences, analytics-led decision-making and technology-led capability building.
India's fintech sector is a global leader, boasting the highest adoption rate at 87%, which is well-above the global average of 67%4. The success of the Unified Payments Interface (UPI) is a shining example of this, with a record 189 billion transactions worth ₹261 trillion processed in FY'25.5 The government's ambitious target of 2-3 billion UPI transactions per day is a clear sign of the sector's promising future.6
The government has also implemented novel strategies and initiatives to reduce Non-Performing Assets (NPAs) in the banking sector, yielding positive results and improving the stability of India's financial markets, which ensures a secure environment for investments.
To further strengthen the financial sector and boost financial inclusion, initiatives such as Stand Up India, Pradhan Mantri Mudra Yojana (PMMY) and Pradhan Mantri Jan Dhan Yojana (PMJDY) have been introduced.
Electric vehicles and automobiles
Electric vehicles (EVs) are making a quiet but significant impact on India's mobility sector. While markets in developed economies face uncertainty over EVs, India is implementing supply and demand-side measures to accelerate EV adoption. S&P Global Mobility estimates that India's 2024 passenger EV production has increased by 22.5% year-over-year, to about 125,500 units.7
Government and investor backing for the sector began as early as 2019 with the FAME India (Faster Adoption and Manufacturing of Hybrid Electric Vehicles) Scheme. Under its current Phase II, the scheme has allocated over ₹11,500 crore8 to support the growth of EV adoption and infrastructure.
Targeted incentive schemes for domestic manufacturers, international automotive players and consumers are accelerating India's EV transition. Notably, these include two Production-Linked Incentive Schemes: one for the automobile sector and another for battery storage.9
Policy measures, investment inflows and technological innovation will continue to drive the sector's rapid evolution. Homegrown brands are leading both sales charts and ruling people's hearts, with all India vehicle retail EV penetration for FY reaching 7.8%.10 This success makes the EV industry a promising investment opportunity for all.
Healthcare and pharmaceuticals
As the world's largest vaccine manufacturer and leader in generic medicines, India is rightfully called the “Pharmacy of the World”. It accounts for ~60% of global vaccine production and supplies to over 150 countries.11 More than 50% of India's pharmaceutical exports are shipped to highly regulated markets in the US and the EU.12 It reflects the competitive advantage India offers to global pharmaceutical companies in terms of production, infrastructure, talent pool and R&D. It consistently remains among the top 10 sectors attracting FDI inflows in India. Between April 2000 and December 2024, the drugs and pharmaceuticals sector received $23.3 billion in FDI.13
The World Economic Forum, in a report earlier this year, emphasised India's potential to be a global leader in healthcare.14 Their report lauded India's digital health programmes such as the Ayushman Bharat Digital Mission (ABDM) and eSanjeevani initiative. These programmes are part of India's digital-first outlook, simplifying country-wide health records and enhancing access to healthcare services by strengthening last-mile delivery. With cutting-edge programmes like these and a talent pool of skilled medical professionals, India's healthcare industry ensures seamless access to patients across private and public hospitals.
Digital India is not just about delivering citizen services, but it also includes the use of innovative techniques such as telemedicine, robotics, AI and more in healthcare and med-tech. It positions the country as an innovator and provides a blueprint for healthcare in developing countries. For investors, India's healthcare sector offers a rare combination of scale, innovation and rising demand—a formula that promises resilience and attractive returns in the years ahead.
Renewable energy
Renewable energy is another sector in which India is making impressive strides. In FY 2024-25, the country added over 29.52 gigawatts of new renewable energy capacity,15 with solar energy leading the way. Under the Development of Solar Parks and Ultra Mega Solar Power Project scheme, the government aims to achieve solar power installed capacity of 40,000 MW for projects till 2025-26.
Large-scale projects, such as the Gujarat Solar Park-1 in Patan, the Bhadla Solar Park in Jodhpur, the Dholera Solar Park in Gujarat and the Pavagada Solar Park in Tumakuru, among others, highlight India's growing expertise in building and managing large-scale solar energy parks. The country aims for 500 GW of non-fossil fuel-based energy capacity by 2030 and to become a net-zero economy by 2070.16
Government initiatives, such as the National Green Hydrogen Mission, PM-KUSUM, PM Surya Ghar and PLI schemes for solar PV modules, along with strong participation from homegrown businesses, are all positive signals for global investors.17 Beyond solar, India's focus on green hydrogen and the ramp-up of wind turbine manufacturing is helping position the country at the forefront of the global renewable energy movement.
Infrastructure
Infrastructure has always been a key pillar of India's economic growth story. The recent Union Budgets show a clear commitment to building it for the long term. Capital expenditure on infrastructure has been rising steadily: from ₹10 lakh crore in FY 2024-25 to ₹11.21 lakh crore in FY 2025-26.18
Such investments in India span a wide range of sectors. The country continues to attract investors, sovereign wealth funds and infrastructure-focused private equity firms eager to participate in long-term projects that offer steady returns. From highways and ports to airports, railways and smart cities, there are numerous opportunities for growth. Many of these projects are taking shape under significant national initiatives, such as Viksit Bharat 2047, Bharatmala Pariyojana, Sagarmala, PM Gati Shakti, Jal Jeevan Mission and Smart Cities Mission.
These projects actively support the growing Indian middle class and present an excellent opportunity for stakeholders who want to be part of the nation's expansive growth trajectory.
The International Monetary Fund projects that India will be the fastest-growing large economy in 2025 and 2026 at a 6.2% and 6.3% growth rate, respectively.19 The country steadfastly remains on track for continued growth. The development of India's markets, along with deeper reforms, will support the expansion of the sectors mentioned above, creating further beneficial investment opportunities for all investors. Leveraging this momentum successfully requires investors to determine both the location and timing of their investments.
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