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On June 19, 2025, the United Nations Conference on Trade and Development (UNCTAD) released its World Investment Report 2025. The global investment outlook has turned negative, driven by escalating trade tensions, geopolitical fragmentation, and increasingeconomic volatility. These factors have led to significant downward revisions in Foreign Direct Investment (FDI) projections, affecting GDP growth, capital formation, trade flows, financial stability, and investor confidence. Early 2025 data indicate historically low levels of deal-making and project activity.

Global Investment Trends

The report was launched by UNCTAD Secretary-General Rebeca Grynspan, who cautioned that FDI is increasingly bypassing countries and sectors that need it the most. “Productive foreign direct investment fell by 11% in 2024, marking the second consecutive year of decline. This is not just a downturn – it’s becoming a pattern,” Grynspan noted.

Top destinations for FDI

The United States remains both the largest source and destination for global FDI. Five Asian economies also feature among the top 10 sources of FDI outflows, underscoring Asia’s growing influence in the global investment landscape.

Sharp declines in Key Development Sectors

The report highlights severe investment declines in sectors crucial for sustainable development, particularly affecting vulnerable and underdeveloped economies.

► Renewable energy investments fell by 31%

► Water and sanitation saw a 30% decline

► Agrifood systems dropped by 19%

Although the health sector recorded a 20% rise in investment, the total global amount remains under $15 billion, insufficient to meet demand. These shortfalls are stalling progress in job creation, infrastructure development, and sustainable growth. Immediate global efforts are required to reverse these trends.

Developing Asia: A Mixed Performance

In 2024, developing Asia received $605 billion in FDI, maintaining its status as the top regional destination for foreign investment. However, the region also faced growing policy uncertainty, falling infrastructure investments, and concentrated capital flows. Despite the challenges, Asia remains a vital global FDI hub, particularly in digital sectors and advanced manufacturing.

India’s FDI Performance

India ranked 15th globally in FDI inflows in 2024, up from 16th in 2023, despite a slight dip in total inflows to $27.6 billion. It performed strongly in other investment metrics:

► 4th in Greenfield project announcements, with 1,080 projects in 2024 ► Among the top five countries for international project finance, with 97 deals ► Climbed to 18th position in FDI outflows, with $24 billion in outward investments

India’s focus remained on sectors such as semiconductors and basic metals, while the United States led in Greenfield activity in semiconductors and automobiles. New battery and electric vehicle (EV) assembly units were announced across India, the U.S., and European nations, reflecting a global shift toward clean technology.

FDI Trends in Developing Asia

Greenfield project numbers in developing Asia rose by 5% in 2024, but total investment value dropped by 23% to $363 billion. While the digital economy and metal production saw growth, there were notable declines in:

► Electricity and gas supply ► Petroleum processing

India led the region in capital expenditure for announced projects. Other countries showing positive trends included Azerbaijan, Bahrain, Qatar, and Türkiye. However, international project finance deals in the region declined by 27%, with their total value falling by 43%. Cross-border mergers and acquisitions fell by 57%, largely due to reduced activity in China and divestments in India and the UAE.

Global Capital Allocation Recommendations

The report calls for urgent reform of global financial frameworks. Key recommendations include:

► Rechanneling capital to underserved sectors ► Expanding the use of blended finance ► Aligning investment regulations with the digital and green transition agenda

Conclusion: India’s Resilient Investment Appeal India’s strong FDI performance reflects a decade of policy consistency, robust institutions, and investor confidence. Both central and state government policies have made India one of the fastest-growing major economies and aleading FDI destination.

Despite global economic uncertainties and shifting supply chains, India continues to demonstrate strong fundamentals, a skilled workforce, and a stable investment climate—rein-forcing its position as a key player in the global economy.