India’s Greenfield FDI Rises 61% to $351 Billion in Five Years, Exceeds China’s Inflows

India received $351 billion in greenfield foreign direct investment (FDI) between 2021 and 2025, more than double China’s $159 billion, according to The Economic Times report citing Boston Consulting Group (BCG) data.  

Greenfield investment involves setting up new business operations or facilities in a market. India’s inflows increased 61% from $222 billion in the previous five-year period.  

China’s investment in new ventures fell 54% from $350 billion to $159 billion. Its greenfield FDI had reached $514 billion between 2006 and 2010. 

Investment Trends Across Southeast Asia 

Other Asian markets also recorded changes in greenfield investment during the five years to 2025. Malaysia received $140 billion, an increase of 125%, while Indonesia’s inflows rose 34% to $133 billion. Thailand recorded a 97% increase to $56 billion. 

Vietnam and the Philippines reported declines of 12% and 24%, respectively. The figures come amid changes in how multinational companies distribute manufacturing and sourcing activities across countries. 

Companies Reconsider Supply Chains 

Geopolitical uncertainty has prompted companies to reduce their dependence on individual suppliers and consider sourcing from multiple locations.  

The report suggests that Nikolaus Lang, managing director and senior partner at BCG, told The Economic Times that India could gain from this shift as businesses look for alternatives to their existing supply sources. 

The ‘China Plus One’ strategy, adopted by multinational companies to diversify production beyond China, has also benefited countries such as Vietnam and the Philippines following the pandemic. 

Manufacturing Capacity and Workforce 

Lang identified infrastructure, workforce skills and cost competitiveness as areas requiring continued attention in India. He also highlighted the need to mobilise capital and generate domestic demand to support manufacturing activity. 

Workers trained in processes such as stamping, painting, assembly, and mechatronics are required to increase local production. Without these capabilities, companies may find it difficult to shift more manufacturing operations to India. 

Read More: IMF Raises India’s GDP Growth Forecast to 7% for FY27! 

Conclusion 

India’s greenfield FDI inflows rose to $351 billion in 2021–25, while China’s fell to $159 billion. Infrastructure, skilled labour, production costs and domestic demand remain important factors in expanding India’s manufacturing base. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.