IMPACT OF FOREIGN DIRECT INVESTMENT ON INDIAN ECONOMY

FDI play an important role in economic development of any nation. A country’s technological development and sectoral development is depending upon the level of FDI inflows. Foreign Direct Investment (FDI) as a strategic component of investment is needed by India for achieving the economic reforms and maintains the pace of growth and development of the economy. The paces of FDI inflows in India initially were low due to regulatory policy framework but there is a sharp rise in investment flows from 2005 onwards because of the new policy has broadened. The maximum FDI inflows can be seen in the Service and construction sector while computer software and hardware and drugs sector attract the equal FDI equity inflows i.e. 6% of total FDI inflows. The results also presented that India have received maximum FDI inflows from the Mauritius and followed by the Singapore. The main purpose of the paper is to study the impact of FDI on economic growth in India. This paper also helps to know the share of top investing countries’ FDI equity inflows in India. In order to obtain the objectives of this study, I used secondary data which has been collected from various journals, books, Newspapers and websites etc.