India’s greenfield FDI averages $83 bn annually since 2022, 78% in future-shaping industries: McKinsey

As India focuses on increasing foreign investment in the country, announced ‘greenfield FDI’ – cross-border investment projects that create net new production capacity – into India in 2022-25 (from CY2022 to May 2025) was $83 billion per year, marking an increase of 24% compared to 2015-19, according to a McKinsey Global Institute report on FDI in India and other emerging markets. 

The report highlights that investments in future-shaping industries and resources comprise 78% of the total such FDI announced for India since 2022. The two leading sectors for inward investment are advanced manufacturing and communications and software, together accounting for nearly 50% of announced inflows; these include several automotive and semiconductor megadeals – deals exceeding $1 billion in investment – as well as large data centre investments. 

Past studies have found that greenfield FDI announcements by companies reliably predicted capacity creation on the ground, with realisation rates between 60% and 80%. The analysis does not include other types of FDI, such as mergers and acquisitions.

Europe, the United States and advanced Asia each contributed about 30% to India’s announced inbound greenfield FDI, while such Chinese investment dropped 86% between 2015-19 and 2022-25. Also, announced annual greenfield FDI outflows by Indian firms surged by 64% from $16 billion in 2015-19 to $26 billion in 2022-25, with clean energy and material deals in the Middle East and North Africa (MENA) signalling new investment corridors.