7 Most Profitable Industries in India in Terms of Foreign Investments

Foreign investments are when a company takes the controlling ownership of a business entity in another company. Because of this strategy, foreign companies are directly involved with day-to-day operations in another country which means they aren’t only bringing the required money but also the skill and expertise that is needed for a company to grow.

FDI is a very important monetary source for India’s economic development. FDI started way back in 1991 due to liberalization, and since then FDI has increased in India steadily.

There are certain routes through which India gets FDI like, the Automatic Route, and the Govt route.

Here mentioned are certain pros that you might find while investing in our country

  1. Deep-rooted highly effective administration ensures a calm political environment.
  2. Well developed administration and an independent judicial system make India highly resourceful.
  3. With an extremely educated, skilled, and hardworking workforce, they can efficiently rely on.
  4. Proximity to key manufacturing units, key suppliers, and development sites has resulted in high-growth emerging markets.
  5. With one of the largest consumer bases, any company has the potential of flourishing thereby making India one of the largest markets for manufactured products.

Nothing in these worlds comes without a con, therefore investing in the country might have certain cons as well that needs to be kept in mind while investing.

  1. Weak public finances
  2. High corporate debt
  3. Non-performing assets
  4. Rigid labour regulations
  5. Lack of infrastructure and slow administration work

Even after the pandemic, the end of 2021 showed positive reflection in the stock market for Nifty and Sensex in certain industries like EVs, healthcare, and electronics. India has undoubtedly turned out to be a hot spot for foreign investments.

Some flourishing industries in India in terms of foreign investment

  • Pharmaceutical Industry

Currently, the Pharmaceutical industry is the most profitable industry and global leader supplying a volume of more than 50% of global vaccines all over the globe. India holds 3rd position in the pharma products with a network of more than 3000 drug companies.

One significant step regarding the approval from the drug controller general of India on the anti-viral drug named VIREALEX on March 22 had been a reason for these lucrative investments.

Alongside this union cabinet’s consent on 100% FDI under the automatic route following regulatory compliances in India is another major reason that makes the pharma market a lucrative one.

  • FMCG

Some top management consulting firms in India suggest that these foreign firms invest in the FMCG sector because the economic surveys expect this sector to experience a hike in CAGR of about USD 220 Billion by 2025.

However, as the food market indicates a double rise in growth rate, FMCG serves as an attraction to these foreign investments.

The government trials of investments. The investment in this sector has led to approval of 100% FDI allowance, alongside the decrease in GST bracket from 13*24% to18% for necessary goods like soaps, toothpaste, hair stuff, etc. ensuring an advantageous position in the market.

  • Healthcare Industry

As per the India brand equity foundation, this is one of the significant industries among others, both in revenue and opportunities for employment.

Hospitals, production of medical devices, and outsourcing of medical parts showed subsequent growth in the last few sectors.

As per the latest surveys, the healthcare sector experienced the highest employment drive hiring around 4.7 million people by contributing a GDP of around 2.1% in 2021-2022.

The approval of 100% FDI under the automatic route has positively impacted the growth of foreign investment in this sector.

  • Automobile Industry

The surveys suggest that the market for electric vehicles in India will experience a substantial surge in CAGR of over 90% by end of 2030.


The factors influencing the mass production of these electric vehicles powered by innovation of improved and cost-effective batteries below 100 USD per kilowatt-hour and European regulations on the limits of automobile manufacturers.

Foreign firms starting any company or planning to invest in India in this sector would definitely notice significant growth and profit in these coming years.

  • Media and Entertainment

Another significant industry in India showing an upward trend and increase in the market acquisition is media and entertainment. FDI quit inflows of broadcasting and information have been around 9.6 billion USD.

The growth of OTT platforms brought larger foreign investment and also attracted many investments to follow.

In order to promote this industry, the government of India has raised the FDI allowance limit to 100% which again resulted in top management companies suggesting global companies into this sector.

  • Education Sector

The Indian education sector is one of the most pivotal markets with 100$ FDI allowable by the Government of India.

In addition, the initiatives by the government including the national accreditation regulatory authority bill for higher education successfully resulted in many foreign investments in the country.

Several schools and institutes hold rank among the top 500 universities as per the ranking of QS graduate employability 2022.

Undoubtedly the education sector is the most important part of any economy and it ought to be much more powerful and successful in countries.

In India where there are several different initiatives and scholarships available for education, this sector is a priority and thereby foreign investments in these sectors are immense.

  • Technology

India is one of the top countries globally for innovations, technological advancements, and space exploration.

Different forecasts and surveys suggest that developing research park technologies and science laboratories in India would ensure the growth of CAGR by around 14% by 2025.

Additionally, government support in the technological field attracted a lot of leading foreign companies worldwide.


Undoubtedly India being the second largest country in terms of population is ought to be well off when it comes to foreign investments. With the labour-intensive market and the resources available it becomes extremely easy to attract new investors and easier to make them believe in the industries. India has the largest population making it a huge customer base which no doubt will lead to huge demand and thereby increase in growth of revenue in terms of manufactured products and several services.

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