Singapore remains India's top FDI source for 7th straight year

For the seventh year in a row, Singapore has retained its position as India’s largest source of foreign direct investment, contributing nearly $15 billion in inflows during the fiscal year 2024–25. According to government data released June 1, this accounts for roughly 19% of the total foreign direct investment India received over the year, reaffirming Singapore’s central role in channeling global capital into one of the world’s fastest-growing economies.

Overall foreign investment into India rose by 13% to reach $50 billion in FY25, while total FDI—comprising equity capital, reinvested earnings, and other forms of capital—grew 14% to $81.04 billion, marking the highest level in three years.

Singapore’s FDI into India climbed from $11.77 billion in the previous year to $14.94 billion, extending a trend that began in 2018–19 when it overtook Mauritius as India’s top investor.

In contrast, Mauritius—the leading source of Indian FDI until 2017–18—contributed $8.34 billion during FY25. Other major contributors included the United States with $5.45 billion, the Netherlands with $4.62 billion, the United Arab Emirates with $3.12 billion, and Japan with $2.47 billion. Smaller but still significant inflows came from Cyprus ($1.2 billion), the United Kingdom ($795 million), Germany ($469 million), and the Cayman Islands ($371 million).

Singapore’s dominance in India’s FDI landscape is attributed to a mix of legal, financial, and geopolitical advantages. As a low-tax jurisdiction with a stable political climate and a deep financial market, it has become a preferred gateway for global private equity and venture capital funds investing across Asia. Much of that capital is being deployed in India, particularly in sectors such as financial services, insurance, IT and BPO services, logistics, and pharmaceuticals.

Rumki Majumdar, an economist at Deloitte India, said that India continues to attract steady and long-term capital flows despite global market volatility. “Given that Asia is the second-largest region to attract foreign capital inflows, a significant portion of these funds originate from Singapore. The reasons are manifold. Firstly, as a low-tax jurisdiction with a robust legal system, Singapore serves as a strategic financial gateway to Asia,” Majumdar told news agency PTI.

The Double Tax Avoidance Agreement (DTAA) between India and Singapore has also played a key role in encouraging investment. It allows Singapore-based firms to reduce their overall tax burden on income generated in India, making investments more financially viable.