India's share of global greenfield investment has overtaken China's, yet strategic-sector investment remains concentrated in the Global North. Critically examine the opportunities and constraints for India in attracting frontier-technology FDI.

UNCTAD data show that India received 5.7% of global greenfield investment in 2020–25. China received 2.8%, less than half of India's share [1]. In the same period, strategic sectors such as AI infrastructure and semiconductors grew from 16% to 44% of greenfield project value [2]. That investment is still concentrated in Europe and North America [1]. India's chance to attract frontier-technology FDI is real, but it depends on several conditions.

Opportunities

• China+1 diversification: India ranks ahead of Malaysia (4%) and Indonesia (3.8%) as investors spread their production bases beyond China [1].
• Industrial policy push: Semicon India 2.0 has an outlay of ₹1,27,500 crore. Twelve chip projects worth more than ₹1.64 lakh crore have been approved, and three have begun production [4].
• Compute base: The IndiaAI Mission has expanded shared compute to more than 45,000 GPUs [4].
• Talent: The Chips to Startup programme has trained over 68,000 students in chip design [4].
• Growth premium: UNCTAD calls India the fastest-growing major economy [1].

Constraints

• Pull of the Global North: Low- and lower-middle-income economies attracted only about 10% of strategic-sector investment in 2020–25 [2]. Advanced economies offer deeper capital, existing supplier clusters and research ecosystems.
• Gross vs net: Net FDI fell to just US$1.0 billion in 2024-25, then recovered to US$6.9 billion in 2025-26 [3]. A headline share therefore overstates how much capital stays in India.
• Demand risk: Consumption is under strain from higher prices [1]. This weakens the case for market-seeking investment, where firms build in India to sell to Indian buyers.
• Thin margin: India leads Malaysia by only 1.7 percentage points [1], so its position can be lost.
• Ecosystem gaps: Fabs and data centres need reliable power, water and equipment supply chains. Most of these are still being built.

Way forward

• RBI and DPIIT should publish greenfield, acquisition and exit flows separately.
• The ISM and IndiaAI missions should be judged by India's share of strategic-sector investment, not by its overall greenfield share.
• Keeping inflation stable would also protect domestic demand, which draws investors.

India's lead in greenfield investment gives it a strong start, but strategic sectors are where future value will be created. Pairing mission-mode incentives with macroeconomic stability and transparent FDI data can turn volume into frontier capability. This would advance SDG 9 (industry, innovation and infrastructure) and the goal of a technologically self-reliant Viksit Bharat.