Industry Odisha Bureau, Oct 13: India drew $351 billion in greenfield FDI during 2021–25, says Boston Consulting Group. China’s inflows fell sharply as global investors diversified supply chains. Infrastructure, skills and costs will decide how much India keeps.
For years, many global companies relied on one supplier, often the cheapest. Geopolitical uncertainty is now forcing a rethink. Fresh project capital is moving, and India draws a growing share.
India’s investment jump
India attracted $351 billion in greenfield FDI during 2021–25, Boston Consulting Group (BCG) data shows. Greenfield FDI funds new facilities and projects, rather than buying existing businesses. It is not the same as India’s total foreign investment. The figures track investment into projects, not finished factories. India received $222 billion in the previous five years, 2016–20. That is an increase of more than 50%.
China’s slide
On this measure, India outpaces China by more than two to one. China’s greenfield FDI fell 54% to $159 billion in 2021–25. It had drawn $350 billion in 2016–20. Its peak came in 2006–10, at $514 billion. The decline reflects new project flows, not China’s existing manufacturing base. This does not mean China’s factories are disappearing.
An uneven race in Southeast Asia
Investor concerns about China are steering capital to India and Southeast Asia, experts say. Yet the gains have been uneven. Malaysia’s greenfield FDI jumped 125% to $140 billion. Indonesia rose 34% to $133 billion, while Thailand grew 97% to $56 billion. Vietnam slipped 12% to $115 billion, and the Philippines fell 24%. Both had earlier gained from the “China Plus One” strategy after the pandemic. Under it, companies add production sites beyond China without necessarily leaving.
Why supply chains are shifting
Nikolaus Lang, managing director and senior partner at BCG, sees a broad global realignment. Amid geopolitical uncertainty, multinationals are moving to dual or triple sourcing, he said. That means buying the same input from two or three suppliers. It reduces dependence on any single production centre. Industry is looking for alternatives to the one source it once used. That gives India a role to play, Lang said. He called the Indian market the biggest draw for investors.
What India still needs
Investment interest does not automatically become industrial capability. Lang said India must mobilise capital, build skills and stimulate demand. Factories need heavy upfront funding before production begins. Infrastructure and cost competitiveness also need sustained focus, he said. Skills are a particular concern. Without workers trained in stamping, painting, assembly and mechatronics, firms struggle to localise, Lang warned. Localisation means producing locally instead of relying on imports.
Demand seals the case
Market size matters too. If the local market is big enough, local manufacturing becomes worthwhile, Lang said. Strong home demand lets companies sell what they make locally. That reduces reliance on exports alone to justify a plant.
From capital to capability
The numbers show global capital changing direction in Asia. India has emerged as a leading choice for new projects. But investment flows are not the same as output. Infrastructure, skills, costs and demand will decide whether India’s momentum lasts. For now, it has the attention of global investors.
