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

Over the last 10 years, foreign investors have shifted their preference from Delhi to Maharashtra and, to an extent, Gujarat. While these three States have remained among the top foreign investment destinations in India, their shares have changed significantly since 2015-16.

An analysis by The Hindu of foreign direct investment (FDI) data from the Ministry of Commerce and Industry show that, over the 10-year period 2015-25, the regional concentration of FDI has remained high, with just five States accounting for anywhere between three-fourths and nearly 90% of all FDI coming into the country.

Out of these 10 years, both Maharashtra and Delhi have remained in the top 5 FDI destinations every year. However, their respective attractiveness has reversed direction. Delhi accounted for 32% ($12.7 billion) of all FDI in 2015-16, the highest that year. This fell to 12% ($6 billion) by 2024-25.

In contrast, Maharashtra saw its share grow from 24% ($9.5 billion) in 2015-16 to 39% ($19.6 billion) in 2024-25, the highest share that year. Karnataka has been among the top-5 FDI destinations for nine out of the last 10 years, only losing out to Andhra Pradesh in 2016-17. Karnataka attracted 10% of all FDI in 2015-16, which grew to 13% by 2024-25, the second-highest share that year.

“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,” Rishi Shah, partner at Grant Thornton Bharat, explained.

Mr. Shah explained that, 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.

“This ‘flight to quality’ phenomenon means that States with mature industrial corridors, world-class connectivity, and proven policy frameworks — like Maharashtra’s Mumbai financial hub and Karnataka’s Bengaluru tech ecosystem — become even more attractive relative to emerging centres,” he said.

Gujarat, too, has nearly doubled its share in national FDI, from 6% in 2015-16 to 11% in 2024-25. Gujarat and Tamil Nadu — which saw its share from 11% to 7% over this period — have remained among the top 5 investment destinations in 8 and 7 out of the last 10 years, respectively.