Foreign Direct Investment (FDI)
FDI inflows into India exceeded USD 1 trillion between April 2000 and September 2024 establishing the country as a key investment destination. Around 25% of the FDI came through the Mauritius route receiving around $177.18 billion, followed by Singapore at 24% receiving around $167.47 billion.
Key Sectors attracting FDI in India:
The key sectors attracting the maximum of these inflows include the services segment, computer software and hardware, telecommunications, trading, construction development, automobile, chemicals and pharmaceuticals.
FDI in India’s Food Processing Industry
FDI in India's food processing sector is set to reach USD 368 million during the first half of FY25. Ireland emerged as the leading investor with USD 83.84 million, followed by Singapore at USD 48.45 million and Mauritius with USD 41.65 million.
The Indian government continue to support the expansion within the food processing sector through different incentives, such as the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), and the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme.
The PLISFPI scheme aims to support the creation of global food manufacturing champions and to strengthen the Indian brand of food product's global visibility and wider acceptance in the international markets.
The PMFME scheme was designed to address the challenges faced by the micro-enterprises and to tap the potential of groups and cooperatives in supporting the upgradation and formalization of these enterprises.
FDI in India & France
France is the 11th largest foreign investor in India with a cumulative investment of USD 10.84 billion from April 2000 to December 2023.
India and France are looking at significantly strengthening economic and trade relations, particularly focusing on sectors such as clean energy, new technologies and aviation, alongside their robust defence partnership. France supports ongoing EU-India free trade deal negotiations. France sees India as a fast-emerging economy with great opportunities for French investments. France has also appeared as a major source of FDI for India with more than 1,000 French establishments already present there.
Artificial Intelligence (AI)
India's Generative AI (GenAI) sector has shown a robust growth powered by a surge in investments for business-to-business applications and in Agentic AI start-ups.
Agentic AI is an intelligent computer program that can do things on its own such as making decisions, solving problems without needing a human to tell it exactly what to do. There also seems to be a piercing surge in funding into Agentic AI, which since 2023 has attracted funding of USD 1.3 billion across 53 deals. Reputable tech giants such as Google, Amazon and Microsoft are actively integrating AI agent code into their enterprise product offerings.
Start-ups in GenAI in India have reached USD 51 million in the first half of FY24-25. There has been a noticeable shift from foundation model development to application-focused innovation and investors are acknowledging the ability of GenAI to transform businesses and are supporting start-ups that are delivering tangible value. Over 90% of GenAI funding over the last quarter went to three start-ups – Nutrix AI, Dashtoon and Mihup.
Future of AI in India
India is rapidly establishing itself as a global centre for AI innovation and growth is expected to be driven further by significant government initiatives including the approval of a USD 1.24 billion investment in AI infrastructure. The push for this is transforming India's digital ecosystem and positioning India as a leader in technological advancements. The expansion is driving demand for specialised skills, creating new job opportunities and also driving innovation.
Start-Ups
The United Arab Emirates hosted the inaugural Founders' Retreat in early December 2024, bringing together over 60 of India’s most prominent start-up founders with UAE investors, business leaders, and policymakers gathering to discuss new directions and opportunities in the bilateral investment partnership.
The event marked a significant step toward deepening collaboration between the two nations, focusing on new avenues for investment, innovation, and cross-border partnerships. Estimates suggest that UAE investors have injected approaching USD 20 billion worth of capital into the Indian economy since 2000, significantly benefiting the Indian start-up sector.
Initiatives such as the UAE-India Start-Up Bridge, have only further reinforced this collaboration.
The objective of the Bridge is to enhance and expand the start-up ecosystem between the UAE and India. It seeks to target a minimum of 50 validated start-ups based in India and the UAE with a mission to foster 10 of them into unicorns by 2025.
India start-ups have raised USD 9.2 billion venture capital funding from January-October 2024, with the total disclosed funding value of these deals having jumped by 44.4% year-on-year (YoY) to USD 9.2 billion during the same period. A total of 984 venture capital funding deals were announced in India during January-October 2024 which was a YoY improvement of 5.8% in deal volume.
India has jumped the global trend in Initial Public Offerings (IPO) this year and is now preparing for an incredible substantial wave of start-up IPOs in 2025, with more than 20 start-ups getting ready to list next year.
12 start-ups, including seven technology firms, have gone public in 2024 in India, making it the only major market to show consistent growth in listings over the past decade.
November 2024 has also seen at least 24 Indian start-ups secure nearly USD 182.62 million, led by three growth-stage deals and 19 early-stage deals.
Zepto, an e-commerce company, raised USD 350 million. With this, investors have infused more than USD 1.3 billion in Zepto in the past five months, as quick-commerce growth continues to surge in the country.
Zopper, India's leading insurtech platform, managed to raise USD 25 million in a Series D funding round, co-led by Elevation Capital and Dharana Capital which also saw participation from existing investor Blume Ventures.
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