Developing Asia keeps FDI lead as South-East Asia overtakes East Asia

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Developing Asia FDI lead

Highlights

Developing Asia received $644 billion in FDI in 2025, making up about 40% of global FDI and more than 70% of flows to developing economies.
South-East Asia became Asia's largest FDI recipient subregion in 2025, while India's 44% inflow increase boosted South Asia's totals as East Asia declined and China saw inflows drop from $116 billion to $105 billion.
Semiconductors, digital infrastructure, AI, advanced manufacturing and energy-transition technologies represented 44% of global greenfield investment in 2025, up from 16% five years earlier per UNCTAD.

UNCTAD report tracks shifting investment flows

As reported by UNCTAD, citing UN Trade and Development, its World Investment Report 2026 shows developing Asia received $644 billion in foreign direct investment in 2025, keeping its lead among developing regions. That total represents about 40% of global FDI and more than 70% of flows to developing economies, in a year when the overall pool for developing markets grows just 2% compared with 11% growth in developed economies.

Within the region, the distribution of capital is changing. South-East Asia becomes the largest FDI recipient subregion in Asia in 2025, while inflows decline in East Asia but rise in South Asia, West Asia and Central Asia. India posts a 44% increase in inflows, helping lift South Asia's overall performance.

China remains one of the world's largest recipients even as inflows ease from about $116 billion to $105 billion. The country continues to attract commitments in higher value-added activities including research and development and pharmaceutical manufacturing.

Technology sectors reshape Asia's investment map

Asia's dominance remains concentrated, with eight of the ten largest developing-economy FDI recipients located in the region. Together, they account for about 60% of all inflows to developing economies and more than 80% of Asia's own total.

The regional shift aligns with a broader global move toward strategic industries. UNCTAD says semiconductors, digital infrastructure, AI, advanced manufacturing and energy-transition technologies account for 44% of global greenfield investment in 2025, up from 16% five years earlier.

Many Asian economies enter this phase with established manufacturing bases, supplier networks, large consumer markets and deep regional production links. But the advantages are uneven, and the report says the next priority is less about adding incentives and more about improving investment facilitation, strengthening supplier ecosystems and deepening regional integration so smaller economies can plug into larger production networks.

Our earlier article on Malaysia’s investment appeal highlighted how the country has remained a resilient destination for global capital amid wider uncertainty, supported by relatively stable equities and continued foreign interest. We noted that technology and financial names, backed by investment in digital infrastructure and innovation, were expected to be key drivers of the next wave of inflows and longer-term growth.

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