Global FDI rebound reaches $1.6 trillion, but UN warns developing economies are left behind

Global foreign direct investment (FDI) rose 6% to $1.6 trillion in 2025, ending two consecutive years of decline, according to the UNCTAD World Investment Report 2026. However, the report cautions that the recovery is heavily skewed toward developed economies.

"the recovery is narrow and uneven"

Developed economies saw inflows grow by 11%, while developing economies managed only 2% growth, reaching $901 billion, UNCTAD reported. This stark divergence raises questions about whether the rebound is building productive capacity where it is most needed.

India stands out as a major exception within the developing world. Times of India reported that India's FDI rose by 44% to $39 billion, driving South Asia's total inflows from $34 billion to $46 billion. The region's sharp rise was "largely driven by India," the outlet noted.

Despite the headline gains, UNCTAD observed that project-related indicators suggested a more cautious investment environment. The agency added:

"the rebound is not translating evenly into development opportunities, raising concerns about where capital is flowing and whether it is building productive capacity in regions that need it most"

This uneven pattern underscores the fragile nature of the global FDI recovery, even as overall inflows have turned upward after two years of decline.