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The UN Conference on Trade and Development (UNCTAD) in its World Investment Report 2021 has said that Foreign Direct Investment (FDI) into India increased 27 percent to $64 billion in 2020 from $51 billion in 2019, pushed up by acquisitions in the information and communication technology (ICT) industry, making the country the fifth-largest FDI recipient in the world. It noted that the COVID-19 second wave in the country weighs heavily on the country's overall economic activities but its strong fundamentals provide ‘optimism’ for the medium term.

The report has stated that the pandemic boosted demand for digital infrastructure and services globally. This led to higher values of greenfield FDI project announcements targeting the ICT industry, rising by more than 22 percent to $81 billion. FDI to India has been on a long-term growth trend and its market size will continue to attract market-seeking investments. In addition, investment into the ICT industry is expected to keep growing.

According to the report, the country's export-related manufacturing, a priority investment sector, will take longer to recover, but government facilitation can help. India's Production Linkage Incentive scheme, designed to attract manufacturing and export-oriented investments in priority industries including automotive and electronics can drive a rebound of investment in manufacturing.