FDI in Indian Scenario – An Analytic Study

Presented in International Finance Conference at IIM, Indian Institute of Management, Calcutta, 2009

Posted: 31 Jul 2012 Last revised: 8 Mar 2015

Date Written: July 30, 2012

Abstract

Foreign Direct Investment has been increasingly dramatically across the world. Almost all the countries in the world are realizing the importance of foreign capital’s role in the rapid industrial and economic development. It contributes a lot to the economic growth and industrial development across the world. It even acts as a catalyst in the process of domestic industrial development. Further it helps in speeding up economic activity and brings with it other scarce productive factors such as technical know how and managerial experience, which are essential for economic development.

The era 90’s saw very significant policy changes introduced in the sphere of financial sector, foreign trade, public sector and social sector, The year 1991 was the one when the process of liberalization and globalization hit the Indian economy and pushed our country to break open the 'Inward Looking' policy when the emphasis was accorded to protectionism and import substitution. Since 1991,India has proved to be a key player in the world. Up to 1991, the FDI’s in India are minimal in number and volume and was seen barely in some key areas. Of late, India has taken steps towards allowing FDI in a few sectors. The cabinet approved new FDI norms for several sectors. The major objectives that are focused in the present paper are – To analyze the FDI flows as to identify country wise approval of FDI inflows to India. To examine the component wise approvals of FDI inflows to recognize the major/minor component. To compare the approvals and actual inflows of FDI with a view to find out the gap between them. To explore the sector wise distribution of FDI inflows in order to point out the dominating sector which has attracted the major share?

The data has been analyzed using various statistical tools such as Correlation, regression analysis, trend analysis (Least Square method) so as to draw valid conclusions. The study about the valuation of FDI on a par with that of international accepted methodologies and sectoral distribution of FDI inflows.

Keywords: FDI, inflows, approvals, government. trend analysis & investment

JEL Classification: F35

Suggested Citation

Banerjee, Arindam, FDI in Indian Scenario – An Analytic Study (July 30, 2012). Presented in International Finance Conference at IIM, Indian Institute of Management, Calcutta, 2009. Available at SSRN: https://ssrn.com/abstract=2120028

Arindam Banerjee (Contact Author)

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