Hong Kong looks to grow bilateral investment flows with India

Hong Kong, Nov 16, 2025

Hong Kong, ranked 15th in terms of foreign direct investment inflows into India, is looking at sectors such as fintech, tokenization and green finance for fresh commitments to Asia’s no. 2 economy, according to senior officials at the special administrative region of China.

"India has become an increasingly attractive destination for FDI in recent years, driven by its dynamic and evolving business ecosystem. King Leung, global head of financial services, fintech and sustainability, at the Hong Kong investment promotion department, told ET.

"In the next year, investments are likely to accelerate in these high-potential sectors, supported by Hong Kong’s robust capital raising ecosystem," he said.

Situated on China's southern coast just south of Shenzhen, Hong Kong is in parallel attracting Indian companies and talent to provide depth in its innovation drive in the field of fintech, and digital tech and AI accelerator.

Companies in Hong Kong made a cumulative investment of $4.83 billion from April 2000 to March 2025 in Indian traditional industries such as gems and jewellery, consumer products, logistics and hospitality. Of late, major investments from Hong Kong have also been expanded to sectors that align with India’s rapid digital transformation and sustainability objectives.

"The economic synergy between India and Hong Kong/Chinese Mainland has significantly contributed to this trend," Leung said, adding that Hong Kong companies increasingly view India, which is at the cusp of becoming the third largest global economy, as a promising investment destination.

Local Partners

Hong Kong based firms are partnering with Indian startups to develop B2B solutions in banking, insurance, and wealth management, capitalising on India’s growing digital economy.

Leung said that with global interest in tokenized assets growing, India is likely to benefit from Hong Kong’s leadership in this space. Besides, India’s sustainability goals align well with Hong Kong’s expertise in green financing, where it leads globally in green bonds and loans. The country accounts for about 45% of all green bonds and loans in the Asia Pacific region. This opens significant opportunities for Indian companies seeking capital to meet global sustainability standards, the official said.

The country floated 204 ESG (environmental, social and governance) funds amounting to $149 billion between January to June this year, as compared with 224 issuances for $174 billion in 2024. "Retail green bonds and ESG funds proceeds are for financing projects that directly contribute to sustainable development," said Victor Dawes, chairman at the country's Investor & Financial Education Council.

Meanwhile, venture capital firms, private equity players and over 2,700 family offices of Hong Kong family offices are following the global trend of diversifying their portfolios by focusing on India. "This trend is driven by India’s emergence as a promising growth story in Asia, with analysts and investors expecting sustained economic expansion in the coming years," Leung said.

Two-Way Street

A deepening collaboration between the two Asian nations is expected to unlock more cross-border investments. An increasing presence of Indian talent and venture capital in Hong Kong highlights a strengthening economic synergy between the two regions.

InvestHK, the investment promotion department of the world's third largest global financial centre after New York and London, has had meetings in Mumbai and New Delhi earlier in the year to attract Indian companies to set their base in Hong Kong as a gateway to expand into Mainland China.

"We aim to establish Hong Kong as a hub for international talent by providing advanced R&D spaces and fostering strategic emerging industries such as AI, blockchain, and smart city solutions," said Victor Yim, Head of AI and data science at Cyberport, the country's digital tech hub and AI accelerator.

Cyberport supports overseas expansion and provides financial subsidies to companies establishing operations in Hong Kong and abroad. "These initiatives not only help create high-quality jobs but also attract global professionals to the city," Yim said.

As of June 2024, there were 10 regional headquarters, 10 regional offices, and 50 local offices in Hong Kong with parent companies based in India, highlighting Hong Kong’s strategic importance for Indian enterprises.

"Hong Kong’s financial and start-up ecosystem, which houses nearly 4,700 ventures across sectors like AI, healthtech, fintech, Web3, and other cutting-edge industries, presents significant opportunities for Indian start-ups and investors," Leung said.

"The city’s unique “one country, two systems” framework, combined with its dual role as a “super-connector” and “super value-adder,” is facilitating Indian businesses expanding into the Greater Bay Area and the Association of Southeast Asian Nations markets," he said.

India ranked as Hong Kong's ninth-largest trading partner, with bilateral trade reaching approximately $26 billion. This trade relationship underscores the strong economic interdependence between the two regions.

(The correspondent was in Hong Kong at the invitation of Hong Kong government)

[The Economic Times]