NEW DELHI – The United States emerged as the second largest source of foreign direct investment in India during the last fiscal year, overtaking Mauritius.Equity investments from the US doubled to over $11 billion in 2025-26, as companies chose to invest directly in India rather than channeling funds through a tax-free jurisdiction as they had done in the past.
Singapore remained the top exporter, recording a good increase. Japan has seen a significant increase in the volume of large checks in financial services.Commerce and Industry Minister Piyush Goyal recently said that US companies have committed investments worth about $60 billion in recent months.Since the amendment to the tax treaty with Mauritius, Singapore has emerged as the preferred route for investments in India.
During the last fiscal year, it accounted for about a third of equity inflows.But tax havens are not ignored by investors. The Cayman Islands saw investments in India rise from $371 million in 2024-25 to $2.1 billion last year, although officials indicated this may be due to a small number of investments.
There is also a change in the sectoral allocation of foreign direct investment. Last year saw computer hardware and software emerge as the top attractions, overtaking services.
This may partly be related to the rush of investment in data centers.Food manufacturing was another sector that saw a more than five-fold jump in equity investments, with maritime or shipping and related activities seeing a 30-fold increase to nearly $2 billion in 2024-25.Goyal said that the government is working on several proposals to encourage investments. “We continually address the challenges of increasing self-reliance, especially in areas where our supply chains are highly dependent on certain geographies,” He said.