Maharashtra Gains as Delhi Loses Foreign Investment

Over the past decade, Maharashtra has emerged as a prime destination for foreign investors, eclipsing Delhi's previously held dominance.

This shift reflects changing economic dynamics and investor preferences for states offering more predictable returns and robust infrastructure.

The trend highlights the increasing regional disparity in FDI inflows within India, signaling a need for other states to enhance their investment ecosystems. This realignment of capital could have long-term implications for regional economic growth and development across the country.

Top 5 Key Insights:

FDI Shift: Foreign investors have significantly shifted their preference from Delhi to Maharashtra over the last 10 years. Delhi's share of FDI has decreased, while Maharashtra's has surged, indicating a major change in investor confidence and regional attractiveness.

Maharashtra's Rise: Maharashtra's share of FDI grew from 24% ($9.5 billion) in 2015-16 to 39% ($19.6 billion) in 2024-25, becoming the top FDI destination. This growth is attributed to Mumbai's robust financial ecosystem, strong industrial base, advanced logistics infrastructure, and stable policy environment.

Delhi's Decline: Delhi's share of total FDI fell from 32% ($12.7 billion) in 2015-16 to 12% ($6 billion) by 2024-25, despite remaining among the top 5 FDI destinations. The decline suggests a relative loss of investor confidence, potentially due to slower infrastructure growth or policy uncertainties compared to Maharashtra.

Karnataka's Consistency: Karnataka has consistently performed well, maintaining a strong position in attracting FDI. Its share increased from 10% in 2015-16 to 13% by 2024-25, driven by Bengaluru's thriving tech and innovation ecosystem, solidifying its place as a key investment hub.

Investor Risk Aversion: Amid global uncertainties, investors are increasingly risk-averse, gravitating towards established ecosystems with predictable returns. Maharashtra and Karnataka exemplify these "safe havens" for capital, offering world-class infrastructure, proven policy frameworks, and stable regulatory environments.

Expert Insight:

Rishi Shah, partner at Grant Thornton Bharat: "The fact that Maharashtra and Karnataka captured 51% of India's FDI in 2024-25 is not merely a statistic — it's a revelation of how capital behaves during uncertain times.

As global FDI inflows face headwinds and investors become more risk-averse, they inevitably gravitate toward established ecosystems that offer predictable returns and robust infrastructure."

Wrap-up:

The shift in foreign investment from Delhi to Maharashtra underscores the importance of stable governance and robust infrastructure in attracting global capital. As investors navigate uncertain economic times, regions offering predictable returns and well-established ecosystems are poised to benefit.

This trend highlights the increasing competition among Indian states to attract foreign investment, which is crucial for driving economic growth and development. Ultimately, this realignment of capital flows will likely shape the future landscape of India's regional economies.

Author Bio:

Rohan Desai has dedicated 10 years to analyzing business trends, technological innovations, and international trade dynamics. His expertise spans from startup ecosystems to global economic policy.

Citations: Foreign investors shift money out of Delhi to ‘promising’ Maharashtra