Impact of Foreign Direct Investment (FDI) on Economic Growth of India

By : M. Syed Ibrahim

Page No: 375-383

Abstract
Foreign Direct Investment (FDI) plays an important role in global business and it affords a firm with new marketing channels, cheaper production facilities, access to technology transfer, and financing. With the advent of globalisation and strong governmental support, foreign investment has lent a hand and the Indian economy has grown tremendously. India has constantly sought to attract investment from the world’s major investors. In 1998 and 1999, the Government of India announced a number of reforms designed to encourage and promote a constructive business environment for investors. FDI means an investment through which the non-resident investor and foreign company can start a new company or can acquire shares in an existing Indian company. Foreign investments in the country can take the form of investments in listed companies i.e., Foreign Institutional Investors (FIIs), Investments in listed/unlisted companies other than through stock exchanges i.e., through the FDI or private equity/foreign venture capital investment route, investments through American Depositary Receipts (ADR), Global Depositary Receipts (GDR), investments by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) in various forms. This paper attempts to review the impact of FDIs in Indian economy, particularly after a decade of economic reforms, and analyse the role played by FDI in the economic development of the country. The study is diagnostic and exploratory in nature and makes use of secondary data. The study finds and concludes that the FDIs in India have significantly improved and have developed the economy as well.

Author :
M. Syed Ibrahim : Assistant Professor and Research Supervisor, Post-Graduate and Research Department of Commerce, Govt. Arts College (Autonomous), Salem-636 007. Tamil Nadu, South India.
 

DOI: https://doi.org/10.32381/PROD.2021.61.04.1