Overview: India attracted US$19.81 billion in FDI equity inflows during the April-June 2026 quarter, up 6% from a year earlier, according to DPIIT data. Japan emerged as the largest source at about US$5.71 billion, while services and computer software and hardware together attracted significant investment. The data highlights the countries and sectors shaping India’s latest foreign investment flows.
India’s latest FDI figures point to more than just a year-on-year increase in foreign equity investment. The country and sector-wise composition of inflows provides a clearer picture of where international investors are committing capital and which parts of the Indian economy are attracting attention.
For businesses looking at foreign-funded expansion, joint ventures or new operations in India, these trends also bring the focus back to the practical aspects of structuring and complying with the applicable FDI and FEMA framework.
The quarterly increase, however, was not evenly spread across the three months. FDI equity inflows nearly doubled year-on-year in April to US$ 12.1 billion, but fell more than 45% in May to US$2.8 billion and about 29% in June to US$4.91 billion. The data therefore points to a stronger quarter overall, but not a uniform month-on-month improvement
Japan Leads India’s FDI Equity Inflows
India received US$19.81 billion in FDI equity inflows during the April-June 2026 quarter, compared with US$18.62 billion in the corresponding quarter of FY 2025-26.
Japan was the largest source of FDI equity inflows at approximately US$5.71 billion, followed by Singapore at US$5.22 billion. Mauritius, the Netherlands, the United States and the UAE were also among the major sources.
The country-wise numbers were not uniform. US equity inflows, for example, declined by more than 76% to around US$1.34 billion during the quarter. This variation shows why the overall FDI number alone does not fully capture changes in India’s foreign investment landscape.
Services and Technology Remain Key Investment Areas
The services sector attracted around US$7.04 billion in FDI equity during the quarter, making it the largest sectoral recipient. Computer software and hardware followed with about US$2.84 billion.
The concentration of investment in these areas is relevant for businesses operating in services, technology and digitally enabled sectors. However, the applicable FDI conditions depend on the specific business activity, ownership structure and sectoral regulations.
What Foreign Investors Should Check Before Investing in India
The availability of foreign capital is only one part of an investment decision. Before bringing FDI into India, investors should identify the proposed business activity and check the applicable Automatic or Government Route, sectoral cap and ownership conditions.
The proposed shareholding structure, source of funds, valuation and transaction documents should also be aligned with applicable FEMA requirements. Depending on the activity, additional sector-specific conditions may apply.
Indian companies receiving foreign capital may have prescribed FEMA reporting and documentation requirements and should maintain accurate records of their shareholding and investment transactions.
Indian businesses making eligible investments overseas should separately assess the Overseas Direct Investment (ODI) framework, including permitted activities, investment structure, financial commitment, banking arrangements, reporting and documentation.
SetIndiaBiz Support
SetIndiaBiz supports foreign investors and Indian businesses with FDI structuring, FEMA compliance and regulatory documentation. Our experts offer comprehensive guidance and support in assessment of the business structure, FDI route, sectoral cap, ownership conditions, approval requirements, valuation, transaction documentation and prescribed reporting.
For overseas investors entering India, SetIndiaBiz also assists with company incorporation for foreign investors and India entry services. Indian businesses can also seek support for eligible ODI structuring and related FEMA compliance.
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FAQs
How much FDI equity did India receive in Q1 FY 2026-27?
Which country was the largest source of FDI equity inflows in Q1 FY27?
Which sectors attracted the highest FDI equity inflows?
The services sector attracted around US$7.04 billion, followed by computer software and hardware at about US$2.84 billion during April–June 2026.
What should foreign investors check before investing in India?
Foreign investors should identify the proposed business activity and verify the applicable FDI route, sectoral cap, ownership conditions and approval requirements.
They should also assess FEMA requirements, valuation, transaction documentation and prescribed reporting obligations before completing the investment.
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Author Bio
Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.
