ASSOCHAM Urges India to Prioritise High-Impact FDI for Jobs

ASSOCHAM calls for India to prioritise high-impact FDI that creates jobs, supports technology transfer, strengthens domestic supply chains and boosts exports rather than focusing only on investment volumes.

India should focus on attracting high-impact foreign direct investment (FDI) that generates employment, strengthens domestic capabilities, facilitates technology transfer and supports exports, according to an ASSOCHAM study. The industry body said the next phase of India’s FDI strategy should move beyond headline investment volumes and place greater emphasis on the economic value created by foreign investments.

According to the study, India’s FDI inflows have increased significantly over the past 25 years. Total FDI inflows rose from around $4 billion in FY2000-01 to about $95 billion in FY2025-26, while FDI equity inflows increased from $2 billion to approximately $59 billion during the same period. Cumulatively, India received about $1.16 trillion in FDI and $791 billion in FDI equity between FY2000-01 and FY2025-26.

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ASSOCHAM said the scale of investment alone does not fully capture its contribution to the economy. The study calls for policies that encourage foreign companies to become more deeply integrated with Indian supply chains, local manufacturing networks, research and development activities and export-oriented production.

The industry body highlighted employment generation and technology transfer as important outcomes for future FDI. Greater integration with domestic enterprises could help Indian companies participate in global value chains while supporting the development of skills, manufacturing capabilities and supporting industries.

The report also points to the importance of building sustained industrial ecosystems around foreign investments. According to the study, India’s policy framework should encourage investments that remain in the country, expand their operations and develop stronger linkages with domestic businesses rather than focusing only on initial capital inflows.

The approach also aligns with India’s efforts to increase manufacturing capacity and exports. Government data shows that Production Linked Incentive (PLI) schemes across 14 sectors had attracted more than ₹2.40 lakh crore in investment and generated over 14.15 lakh jobs, including direct and indirect employment, as of March 31, 2026. The schemes had also enabled exports worth more than ₹15.2 lakh crore.

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ASSOCHAM’s recommendations come as India seeks to strengthen its position in global supply chains and attract investment across manufacturing, technology and other high-value sectors. A greater focus on domestic value addition, technology capabilities, employment and exports could shape the country’s FDI policy as it moves toward the next phase of industrial development.