Foreign Direct Investment in India - Trends, Pattern and Linkage
SMART: Journal of Business Management, Vol. 10, No. 1, 2014
12 Pages Posted: 30 Apr 2014
Date Written: April 29, 2014
Foreign Direct Investment (FDI) plays an important role in the growth process of a country. There are two types of FDI: Inward Foreign Direct Investment (IFDI) and Onward Foreign Direct Investment (OFDI). We analyze the trends and pattern of FDI in India in this paper. To examine the structure of IFDI in India in the past 23 years (1990-2012), data were collected from various published sources. The trend in India's Foreign Direct Investment, after the economic reforms, was assessed to analyze the impact of IFDI on the economic growth of the country in terms of GDP. The study confirmed that GDP, OFDI and Export have positive significant effects on IFDI in India. On the other hand, the import was not significant in determining the IFDI in the country. Ii is found that developing nations like India are able to attract IFDI on par with the developed countries while their overseas investment (FDI outflow) is far lesser that the developed countries.
Keywords: Foreign Direct Investment, Economic Growth, Export, Import, GDP
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