Singapore has retained its crown as India’s largest FDI source for the seventh consecutive year, with inflows during FY24-25 of close to $15 billion.
- Singapore remains India’s top FDI source for the 7th year, contributing nearly $15 billion in FY24-25.
- India’s total FDI inflow rises 14 percent to $81.04 billion, marking the highest in three years.
- FDI from Singapore to India surges, driven by tax advantages, regulatory ease, and strong financial ties.
This represented roughly 19 percent of the total FDI that came into India over the year according to government data released on June 1, further corroborating Singapore’s pre-eminent role in directing capital from around the world into possibly one of the fastest-growing economies in the world.
Aggregate foreign investment in India increased 13 percent to $50 billion in FY25, while total FDI - which includes equity capital, reinvested earnings, and other capital forms - increased 14 percent to $81.04 billion, which is the highest in three years.
Singapore’s FDI into India increased from $11.77 billion in the prior year to $14.94 billion, and this has been a continual trend that started in 2018-19 when Singapore surpassed Mauritius as India’s largest source of FDI.
In comparison, Mauritius - the largest investor over the FDI period until 2017-18 - provided $8.34 billion during FY25. The other major sources of FDI included the USA ($5.45 billion), Netherlands ($4.62 billion), United Arab Emirates ($3.12 billion) and Japan ($2.47 billion). Smaller amounts but certainly substantial contributions came from Cyprus ($1.2 billion), United Kingdom ($795 million), Germany ($469 million) and Cayman Islands ($371 million).
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Singapore's ascendancy in FDI inflows to India is due to a confluence of regulatory, financial, and political advantages. Like most low taxing jurisdictions, Singapore has a stable climate for business, a deep financial market, and is a preferred gateway for global private equity investment and venture capital funds going into South-East Asia, a large portion of which finds its way into India across sectors including financial services, insurance, IT and BPO services, logistics, and pharmaceuticals.
The Philippine - Singapore DTAA has also made a significant impact by greatly lowering the overall tax obligation on any income sourced from India by Singapore firms, which improves their investment ability.
Rumki Majumdar, an economist at Deloitte India says, “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”.
