FDI in India: Leading to economic growth

Abstract

Foreign Direct Investment (FDI) plays predominant role in the improvement of nation's growth and the global business. Foreign Direct Investment (FDI) is an important tool which is used currently in the overseas market and it is also a key factor which supports the investors to enter into the economy. In the developing countries FDI also enhances the exports made by the manufacturing firms through overflow effects on local companies by the means of exporting activities. There is a direct and indirect effect on the host country's exports to the FDI. New paradigms in the marketing channels can be endorsed due to the help of FDI, access to technology is also possible, product skills and financing could be done easily. Capital is in when domestically available capital is insufficient for the purpose of overall development of the country, foreign capital is seen as a way of filling up this gap. FDI inflows to India remained sluggish, when global FDI flows to EMEs had recovered in 2017-18, despite sound domestic economic performance ahead of global recovery. This paper gathers evidence through a panel exercise that actual FDI to India during the year 2017-18 fell short of its potential level. An attempt is made through this paper to know the FDI equity inflows from various countries to India. An attempt has been made by the researcher through this paper to examine the economic growth through FDI. For the analysis the statistical tools like one – Way ANOVA, K-S Test has been used and the suggestions and the recommendations are based on the approach.