A Study on Factors Affecting Foreign Direct Investment Inflows in India

Sonia Goel

A Study on Factors Affecting Foreign Direct Investment Inflows in India

Keywords : Foreign Direct Investment, Economic Development, Foreign Exchange


Foreign direct investment is one of the most essential tools for growing the economy of a country. Economic growth of a nation is dependent on many factors such as growth in agriculture and manufacturing sector, exchange rate and international investment. In spite of different factors affecting the growth, the growth of foreign direct investment in different sectors is considered to be an essential factor which controls all other factor. Foreign direct investment is very useful in growth of a country particularly in the capital scarce country by way of improving their infrastructure, technical skills, entrepreneur abilities and financial resources in terms of government revenue and foreign exchange. Foreign direct investment has played a very important role in the economic development of India also. FDI has solved the several problems of India i.e. lack of capital, modern technology and capital goods etc. In last two years, Government has brought major FDI policy reforms in a number of sectors viz. Defence, Construction Development, Insurance and Pension Sector etc. This paper is an attempt to identify the recent trend in the FDI and various factors which affect the foreign direct investment inflows in India.


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