The foreign investment inflows stood at $28.78 billion in 2014, according to data by the Department of Industrial Policy and Promotion (DIPP).
The computer hardware and software sector attracted the highest FDI, followed by services, trading business, automobiles and chemicals.
Singapore emerged as the biggest FDI source, followed by Mauritius, US, Netherlands and Japan.
The government has taken several steps to promote investments through a liberal FDI policy. It has relaxed norms in several sectors, including single brand retail, e-commerce and construction.
"The focus on improving ease of doing business in the country and relaxation of norms would help in attracting more and more FDI," an official said.
The Economic Survey 2015-16 had said that a favourable policy regime and sound business environment have facilitated increase in FDI flows into the country.
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