India becomes a top FDI destination as AI dominates global investment

India attracted $39 billion in foreign direct investment in 2025, a 44 per cent increase from the previous year. This placed it among the world's largest investment destinations, according to the United Nations' World Investment Report 2026. The rise came even as project announcements across Asia weakened because of trade policy uncertainty, tariff measures, and delayed investment decisions.

According to the report, global investment is increasingly shifting towards AI infrastructure and digital technologies. Between 2021 and 2025, AI infrastructure and AI-related technologies increased their share of global investment from 30 to 59 per cent.

Meanwhile, the share of semiconductors fell from 38 to 26 per cent and energy transition technologies from 24 to just nine per cent. The UN report attributes this shift to growing demand for data centres, cloud infrastructure, and computing capacity needed to support AI.

AI infrastructure is also changing what investors look for when choosing destinations. AI projects require large-scale physical infrastructure such as data centres, cloud platforms, and high-capacity digital networks. As a result, access to reliable electricity, land, digital connectivity, and regulations has become increasingly important for attracting investment.

India has emerged as a key destination for AI infrastructure investment. The largest announced greenfield project in Asia in 2025 was Alphabet's $14.5-billion data-centre investment in India. The report attributes India's growing appeal to its large digital market, expanding cloud services, skilled workforce, and rapidly developing digital ecosystem.

The report also notes that investment across Asia is increasingly concentrated in electronics, AI infrastructure, data centres, renewable energy, and battery supply chains. In India, while announced manufacturing investment weakened in 2025, services remained resilient, with information and communication technology emerging as the country's largest greenfield investment sector.

India attracted $39 billion in foreign direct investment in 2025, a 44 per cent increase from the previous year. This placed it among the world's largest investment destinations, according to the United Nations' World Investment Report 2026. The rise came even as project announcements across Asia weakened because of trade policy uncertainty, tariff measures, and delayed investment decisions.

According to the report, global investment is increasingly shifting towards AI infrastructure and digital technologies. Between 2021 and 2025, AI infrastructure and AI-related technologies increased their share of global investment from 30 to 59 per cent.

Meanwhile, the share of semiconductors fell from 38 to 26 per cent and energy transition technologies from 24 to just nine per cent. The UN report attributes this shift to growing demand for data centres, cloud infrastructure, and computing capacity needed to support AI.

AI infrastructure is also changing what investors look for when choosing destinations. AI projects require large-scale physical infrastructure such as data centres, cloud platforms, and high-capacity digital networks. As a result, access to reliable electricity, land, digital connectivity, and regulations has become increasingly important for attracting investment.

India has emerged as a key destination for AI infrastructure investment. The largest announced greenfield project in Asia in 2025 was Alphabet's $14.5-billion data-centre investment in India. The report attributes India's growing appeal to its large digital market, expanding cloud services, skilled workforce, and rapidly developing digital ecosystem.

The report also notes that investment across Asia is increasingly concentrated in electronics, AI infrastructure, data centres, renewable energy, and battery supply chains. In India, while announced manufacturing investment weakened in 2025, services remained resilient, with information and communication technology emerging as the country's largest greenfield investment sector.