Daijiworld Media Network – New Delhi

New Delhi, Jul 25: Known as India's Silicon Valley, Karnataka has secured the top spot in the country in attracting foreign direct investment (FDI). With tech investors and global capability centres (GCCs) turning towards Bengaluru, the FDI inflow into the state almost doubled in the last financial year, reaching a whopping $13 billion (around Rs 1.25 lac crore).

The latest official data presented by the central government in the parliament on Tuesday revealed this significant development. Notably, Karnataka overtook Maharashtra, a major industrial hub that had been leading in FDI inflows for the past two years. During this period, Maharashtra witnessed a 6% decline in inflows.

In the financial year 2025, Karnataka had attracted foreign investments worth around Rs 62,000 crore. However, by the financial year 2026, this volume jumped by a massive 95% to reach record levels.

The country's overall equity inflows also saw a recovery of 17.6% last year, reaching $58 billion. Along with Karnataka, states like Haryana, Tamil Nadu, Rajasthan, Uttar Pradesh, Andhra Pradesh, and Punjab saw a substantial increase in foreign capital investments. However, neighbouring Telangana witnessed a steep 25% decline in FDI inflows. Meanwhile, Gujarat maintained its stability to retain the third position with investments of around $5.7 billion (approximately Rs 55,000 crore).

A lion's share of the foreign investments flowing into the state and the country has gone to technology-based companies. In particular, data centres, global capability centres (GCCs), and e-commerce giants like Amazon and Flipkart have attracted massive capital.

Key sector-wise investment details are as follows:

• Computer software and hardware: This sector succeeded in fetching the highest investment nationwide, amounting to $13.9 billion (around Rs 1.34 lac crore).
• Service sector: This sector, comprising banking, finance, and insurance, attracted $10 billion (around Rs 96,000 crore) in investments. This accounts for nearly 40% of the total FDI that came into India.

While other manufacturing and key sectors also made significant progress in attracting foreign investors, certain specific sectors faced setbacks:

• Food processing and other industries: Foreign investment in the food processing industry witnessed unprecedented growth, jumping nearly six-fold to reach $3 billion (around Rs 28,000 crore).
• Automobile and pharma: The automobile manufacturing sector recorded strong growth by attracting $2.5 billion (Rs 24,000 crore), followed by the pharmaceutical sector with $1.9 billion (Rs 18,000 crore) and the education sector with $1.3 billion (Rs 12,000 crore).
• Sectors that saw a decline: Despite technological advancements, FDI inflow into the electronics sector plummeted by almost half to $1.1 billion (Rs 10,000 crore). Furthermore, the aviation sector suffered a massive 70% setback, with investments dropping to just $383 million (around Rs 3,600 crore).

Overall, amidst global economic fluctuations, Karnataka has emerged as the primary choice for global investors in the country, driven by the strength of its infrastructure and technology ecosystem.