Introduction
India has steadily evolved into one of the fastest-growing major economies, offering a vibrant and welcoming environment for investors from around the world. With real GDP expanding by 7.8% in Q1 FY26, the country continues to lead global growth, powered by strong domestic consumption, a young and skilled workforce, and consistent policy reforms.
Over the past decade, India has attracted FDI worth Rs. 66,37,734 crore (US$ 748.78 billion), reflecting rising investor confidence and the country’s growing economic depth. A thriving middle class of nearly 400 million people, rising incomes, and increasing rural demand continue to drive consumption across sectors. The investment ecosystem has also broadened, with retail participation reaching new highs as more than 9.5 crore investors now hold stocks directly and over 11 crore invest through mutual funds, whose assets have expanded sixfold in ten years. Supported by stable governance, improved infrastructure, and a growing focus on technology and sustainability, India is steadily laying the groundwork for long-term, inclusive, and resilient growth.

Market Activity
Real Gross Domestic Product (GDP) grew by 7.8% in Q1 FY26, the highest in the last five quarters. In comparison, growth was 7.4% in Q4 FY25 and 6.5% in Q1 FY25. According to the Ministry of Statistics and Programme Implementation, nominal GDP rose by 8.8% during the same period. The Reserve Bank of India (RBI) has raised India’s GDP growth forecast for FY26 to 6.8%, up from its earlier estimate of 6.5%. These figures make India the fastest-growing major economy in the world, and this economic growth has translated to the domestic investment market in India. Retail investors, mutual funds, and PE/VC firms have all stepped up their domestic investments in the Indian market.
The stock market has seen a significant increase in the number of retail investors, exceeding 9.5 crore. These investors directly hold nearly 10% of the market through investments in ~2,500 listed companies. Retail investments, both direct and indirect through mutual funds, have increased over nearly seven-fold in the past decade, with the total number of investors reaching 11.5 crore as of May 2025, according to data from the National Stock Exchange (NSE).
India registered 301 Private Equity (PE) deals worth Rs. 49,745 crore (US$ 5.7 billion) in Q3 2025, recording a 7% rise over the previous quarter. India-focused PE-VC funds raised Rs. 21,576 crore (US$ 2.47 billion) across 22 funds, a 148% YoY increase, driven by strong inflows into the IT & ITeS sector (US$ 2.4 billion). Mumbai led in investment value, while Bangalore topped in deal volume, reaffirming their positions as India’s leading investment hubs.
On the FDI front, according to the Department for Promotion of Industry and Internal Trade (DPIIT), India's cumulative FDI inflow stood at Rs. 97,22,411 crore (US$ 1.09 trillion) between April 2000-June 2025; this was mainly due to the government's efforts to improve the ease of doing business and relaxed FDI norms.
From April 2000 to June 2025, India’s services sector attracted the highest FDI equity inflow of 16%, amounting to Rs. 7,93,783 crore (US$ 90.20 billion), followed by the computer software and hardware industry at 16%, amounting to Rs. 8,31,772 crore (US$ 94.52 billion), trading at 6% amounting to Rs. 3,38,826 crore (US$ 38.50 billion), telecommunications at 5% amounting to Rs. 2,41,299 crore (US$ 27.42 billion), and the automobile industry at 5% amounting to Rs. 2,59,753 crore (US$ 29.52 billion).
India also recorded major FDI inflows during April 2000-June 2025, coming from Singapore at Rs. 12,57,392 crore (US$ 142.88 billion) with a total share of 24%, followed by Mauritius at Rs. 11,10,692 crore (US$ 126.22 billion) with 21%, the USA at Rs. 5,41,654 crore (US$ 61.56 billion) with 10%, the Netherlands at Rs. 3,68,694 crore (US$ 41.90 billion) with 7%, and Japan at Rs. 2,88,090 crore (US$ 32.74 billion) with 6%.
India’s SME IPO market maintained strong momentum in 2025, with companies raising Rs. 6,819 crore (US$ 769.5 million) by end-August 2025, making it the second-highest fundraising year on record after 2024. The trend reflects sustained investor confidence and growing participation of small and medium enterprises in capital markets.
Recent Developments/Investments
Recent speedy infrastructure investments, the inclusion of more sectors under the PLI scheme, an increase in public investments, and increasing PE/VC activity have led to plenty of investments in the Indian market. A stabilizing economic backdrop and financial oversight have provided investors with a perfect opportunity to invest in the country and have made India a rising economic powerhouse. Some of the recent investments and developments in this space are as follows:
Government Initiatives
The steps taken by the Government during the last few years to attract investments have borne fruit, as is evident from the record volume of FDI inflow that was received in the country in FY22. The government has launched policies that significantly simplify the ease of doing business, as evidenced by India's jump from rank 142 in 2015 to rank 63 in 2020 in the Doing Business Reports of the World Bank. Some of these policies are:
Road Ahead
India’s growth story continues to build strong momentum, supported by steady policy reforms, a rising domestic market, and growing investor confidence. Over the coming years, the focus will be on deepening the country’s manufacturing base, improving infrastructure, and accelerating digital transformation. Programmes like the Production-Linked Incentive (PLI) schemes, the National Infrastructure Pipeline, and the push towards renewable energy and electric mobility will continue to attract both domestic and foreign investors.
The next phase of India’s economic journey is likely to see greater participation from small and medium enterprises, start-ups, and new-age industries such as artificial intelligence, semiconductors, and green technology. Increased formalisation of the economy and stronger financial inclusion are expected to expand India’s consumer base further.
India’s long-term fundamentals remain strong. A young and skilled population, rising incomes, expanding urbanisation, and a growing middle class will keep domestic consumption robust. Government efforts to simplify regulations, strengthen logistics,

and promote sustainability will also make India a more efficient and competitive destination for investment. In the medium term, the combination of policy stability, investor-friendly reforms, and global interest in India’s digital and green transition will continue to drive the country’s growth. With consistent economic performance and an expanding innovation ecosystem, India is well-positioned to remain one of the world’s most attractive destinations for investment and business opportunities




