FOREIGN DIRECT INVESTMENT: INDIAN EXPERIENCE

Commerce

An economic growth of any country is decided by the volume of investment it makes. Investments are made on the basis of domestic savings and borrowing capacity. After New Economic Policy with globalization, Foreign Direct Investment gained momentum. In the recent years, Foreign Direct Investment (FDI) plays an important role in development of an economy. It is a major source of non-debt financial resource for the economic development. The tremendous growth of global FDI around the world makes the development of both the developed and developing nations. The home and host countries are interested in taking advantages of FDI like market openness, technological advancement, managerial skills and increase in foreign exchange. In India, FDI has increased financial stability and growth in GDP. FDI as a component of investment helps India for achieving the economic reforms. In recent years, the impact of FDI inflows into India is highly significant. The impact of globalization has made India to open its country’s market to foreign investments. Thus, trade barriers were removed and Indian industry had a tremendous growth in all sectors. As a result, India has improved in technology and international trade. India after liberalization and globalization of the economy in 1991, there was a massive increase in the flow of Foreign Direct Investment. The recent trends of digitization and robotization have helped in the increased inflow of foreign funds to India. In 2014, 'Make in India' campaign initiated in India to transform the nation into a manufacturing hub for global players. The study focuses on to analyze the progress of foreign direct investment in the Indian economy.

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