FOREIGN DIRECT INVESTMENT AND INDIAN ECONOMY

Vidhi Maggo

Volume : VI, Issue : V, May - 2016

FOREIGN DIRECT INVESTMENT AND INDIAN ECONOMY

Vidhi Maggo

Abstract :

Foreign direct investment (FDI) is widely believed as a catalyst for the economic development in developing countries. It is preferred over all foreign capital flows. It is considered as an important source of growth since it is a non–debt capital inflow. This paper is an attempt to throw some light on the bumpy beginnings of FDI in Indian economy. After economic reforms of 1991, many changes were introduced in the India’s foreign policy. Against this backdrop, this paper highlights the vital determinants of FDI in India as propagated by many scholars. It presents a historical perspective over the evolution of FDI in India and also envisages discussing the advantages and disadvantages of FDI inflow with reference to the Indian economy. Finally, it offers an outline of the current FDI policy in Indian Economy and the paves way to the future prospects.