Whalesbook
Foreign direct investment (FDI) companies in India recorded a net sales growth of 8.7% in fiscal year 2024-25. This marks a slowdown from the 9.4% growth seen in the previous year, reflecting mixed performance across key sectors.
Services Outpace Manufacturing
The services sector showed strength, with net sales growth rising slightly to 12.7% from 12.2% a year earlier. In contrast, the manufacturing sector faced a significant slowdown, with sales growth dropping to 5.1% from 6.8% previously. This divergence highlights different economic conditions affecting India's industrial and service industries.
Profit Surge Driven by Non-Sales Income
While sales growth slowed and expenses rose, operating profit grew much slower at 10.7% in FY25, down from 22.1% in FY24. Nevertheless, companies significantly increased their profit after tax by 22.2%. This jump was mainly due to higher non-operating income and lower interest costs, rather than gains from core sales.
Key Investor Nations and Sectors
Over half of the sampled FDI firms received direct investment from Singapore, the United States, and Mauritius. Japan, the Netherlands, and the United Kingdom were also significant sources of investment. Most of these companies operate in manufacturing and services, with many service firms focused on information and communication technology.