Worldwide foreign direct investment rose 6% in 2025 to $1.6 trillion, breaking a two-year decline, but the recovery is “narrow, fragile and uneven”, the UN Conference on Trade and Development (UNCTAD) reported on Tuesday. The headline figure conceals deep disparities: 20 countries attracted more than 80% of global inflows, and growth was driven by a small number of capital-intensive megaprojects, chiefly data centres, oil and gas, and semiconductors. Most other sectors, including renewable energy, infrastructure and manufacturing, registered declines, the World Investment Report 2026 found.

Developed economies captured the bulk of the increase, with inflows rising 11% to $723 billion, while developing countries saw only a 2% uptick to $901 billion. Developing Asia remained the largest recipient region at $644 billion, but Africa’s inflows fell 26% to $70 billion. The least developed countries received $43 billion—a 21% jump that still represented just 2.7% of the global total, concentrated in a few resource-rich economies. UN Secretary-General António Guterres warned that the expansion “masks underlying fragility and disparities”, driven largely by AI-related infrastructure.

Viewed from New Delhi, India’s FDI surged 44% to $39 billion, consolidating its position as a key destination, though greenfield project announcements fell sharply from $111 billion in 2024 to $74 billion, with manufacturing commitments halving. In Mexico City, the country returned to the top 10 recipients with $41 billion, buoyed by nearshoring in manufacturing, but UNCTAD noted a “pronounced” drop in green-energy project announcements and cautioned that US tariffs on steel, aluminium and autos were deterring investment. The United States remained both the top recipient ($277 billion) and the largest outward investor ($263 billion), while Europe’s inflows jumped 39% to $285 billion.

Governments are responding with unprecedented policy activism: a record 229 investment policy measures were enacted in 2025, most favourable to investors but many designed to channel capital into strategic industries or address economic security concerns. UNCTAD’s outlook for 2026 points to persistent headwinds—trade policy volatility, geopolitical tensions, high financing costs and economic fragmentation—that continue to weigh on investment decisions. The report warns that as investment becomes more capital- and technology-intensive, many developing economies risk being left behind, unable to match the policy support offered by wealthier nations.