Investments in India by state-owned investors (SOI), including sovereign wealth funds, fell more than 70% y-o-y in 2025 as global capital pivoted toward developed markets, as per Global SWF’s annual report. While global SOI investments grew 32% to USD 278 bn in 2025, India’s share of that pie collapsed to just 2% from 9.5% in 2024, dropping to USD 5.7 bn from USD 20 bn.

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The pullback was sharpest among Gulf funds, with investments in 2025 sliding to USD 1.38 bn from USD 4.32 bn in 2024. The Abu Dhabi Investment Authority invested USD 916 mn, down from USD 2.19 bn. Mubadala and the Kuwait Investment Authority, which collectively put nearly USD 2 bn into India in 2024, made no reported India moves. Global SWF said high rates, geopolitics, and a US-heavy allocation cycle drove the shift.

Plans not yet realized: Mubadala announced plans to double its Asia exposure to 25% over the next decade, yet it made zero reported investments in India in 2025. Despite policy pushes like Gujarat’s investor-friendly business district Gift City, where major investors (Adia, PIF) have set up offices, they are reportedly waiting for “actionable, investable” avenues to actually deploy capital, Global SWF Founder Diego Lopez told Economic Times.

The American magnet: Approximately 50% of all global SOI capital (USD 132 bn) was deployed in the US in 2025, fueled by the AI boom and digital infrastructure.

What comes next: India is banking on its Gift City and PLI schemes to lure capital back. However, “boots on the ground” offices are not enough to compete with the high-yield, high-tech allure of the US, where AI development is attracting record investments. Investors should watch for whether the next crop of Indian Infrastructure Investment Trusts can offer the scale needed to bring Gulf allocators back to the table.

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