Invest India’s Playbook to Strengthen FDI Ecosystem

Invest India, the national investment promotion and facilitation agency of the Government of India, was established in 2009 under the Department for Promotion of Industry and Internal Trade. It serves as the primary point of contact for both domestic and global investors, guiding them seamlessly from initial inquiry to project execution and expansion. By offering clear policy insights, sector-specific expertise, and targeted investor engagement, the agency actively drives investment across key industries. Moreover, through flagship initiatives like Make in India, Invest India fuels economic growth, fosters innovation, and reinforces the country’s standing as a preferred destination for foreign direct investment (FDI).

In an exclusive discussion with The Interview World at the States’ Policy Conclave 2025, hosted by PHDCCI, K Karthikeyen, Vice President of Invest India,  gave an overview of Invest India’s  mandate and strategic interventions to strengthen India’s FDI ecosystem. He provides insights into how various Indian states perform in attracting FDI, identifies the sectors that drive investment across states, and compares India’s FDI performance with other major developing economies.

The following are the key takeaways from his conversation.

Q: Could you elaborate on Invest India’s mandate, operating model, and strategic interventions in strengthening the country’s foreign direct investment (FDI) ecosystem?

A: Invest India is a Section 8 company under the Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry. Its major shareholders include the industry and government, with the central government holding approximately 37% and the remaining 12% distributed among various states. As a pro bono-driven organization, Invest India operates with a clear mandate: to attract foreign direct investment (FDI) into the country.

The agency’s structure is designed to maximize impact. It comprises dedicated countries team, sector-focused teams, and states team, all working collaboratively to facilitate investment. The country team takes a proactive approach by generating leads rather than waiting for companies to approach India. For example, if a large technology company is evaluating expansion in Asia, the team reaches out directly to the company, engages with its board, and presents India as a investment destination highlighting the business case and the anticipated RoI.

Once the lead is generated, the sector teams step in to convert it into a tangible opportunity. They provide in-depth sectoral expertise, understand industry-specific nuances and demonstrate why India offers a unique and profitable opportunity. They answer critical questions such as where, how much, and how to invest in India, thus creating a detailed blueprint for the company.

Finally, the states team engages with investors to navigate state-specific incentives and regulatory frameworks. They provide a comparative analysis of multiple states, accompany investors on site visits, organize business-to-government meetings, and facilitate roundtables. They also guide investors through supply chain considerations and other dependencies, decoding the complexities of business operations in India.

By working seamlessly across these three pillars, country, sector, and state and collaborating with relevant stakeholders, Invest India functions as a unified force, streamlining the FDI journey and making India an accessible, attractive, and strategically viable investment destination.

Q: How are various Indian states performing in attracting FDI, including key trends, differentiators, and emerging patterns?

A: Large part of the FDI in India primarily flows into some of the top-performing states, those already recognized as highly progressive due to an existing industrial ecosystem. Alongside these leading states, several emerging states are rapidly catching up, achieving high growth rates due to their quick turnaround time in investment facilitation. . States like Odisha, Madhya Pradesh, and some in the Northeast, such as Meghalaya and Assam, are positioning themselves competitively, demonstrating their ambition to attract greater investment.

Some states have carved out niche strengths rather than pursuing broad industrialization. Take Goa, for example. It ranks exceptionally well on the Tech Readiness Index as per the recently released PHDCCI report, reflecting its strong digital infrastructure and innovation potential. However, in terms of large-scale industrial clusters or sectors focused on mass job creation, Goa is not a typical industrial hub like Maharashtra; and pushing it in that direction would be neither strategic nor appropriate.

Each state, regardless of its scale, offers tailored incentives and benefits to attract investors in certain sectors. They strategically align their policies with local strengths, making themselves competitive in ways that suit their unique needs. Notably, FDI is increasingly flowing into states that were previously less prominent on the investment map. Madhya Pradesh, Uttar Pradesh, Haryana, and Rajasthan, for example, are significant destinations, complementing the traditional leaders and broadening the geographic spread of foreign investment.

Q: Which three sectors are the primary drivers of investment across these states?

A: To assess sectoral performance, one must examine it from multiple dimensions. From an employment perspective, the textiles sector stands out as a high-growth driver, generating significant job opportunities. When evaluating manufacturing expansion, the pharmaceutical and industrial automation sectors demonstrate robust performance. Similarly, the automotive component sector offers strong employability prospects, reflecting its capacity to absorb skilled labour.

It is crucial to avoid a single-dimensional view. Each sector contributes differently depending on the lens applied: employment, investment potential, or manufacturing output. Furthermore, given that India’s GDP is largely services-oriented, sectors such as ESDM, IT, and IT-enabled services (ITES) continue to play a pivotal role, driving innovation and sustaining economic growth.

Q: How is India performing in attracting FDI compared to other major developing economies?

A: India is already the world’s fourth-largest economy by GDP, and its growth trajectory remains impressive. FDI inflows increased from approximately USD 308 billion (2004-2014/15) to approximately USD 748 billion (2015-2024/25) – a 2.4X growth in the second decade, reflecting competitive investment policies. With this momentum, India is poised for rapid advancement, and there is little time to lose. At the current pace of acceleration, the country is on track to surpass the five trillion-dollar mark much sooner, marking a significant milestone in its economic journey.