Impact of FDI on Indian Economy – An Analytical Study.
Thomas Asha E. (2016). Impact of FDI on Indian Economy – An Analytical Study. International Journal of Business and Administration Research Review, 1, (4), 91-94
9 Pages Posted: 14 Mar 2018
Date Written: 2016
Foreign Direct Investment (FDI) refers to an investment made by a company based in one country in to another company based in other country. FDI is often preferred over Foreign Institutional Investments (FII) as it considered to be the most beneficial form of foreign investment for an economy. FDI plays a multidimensional role in the overall development of any economy. It provides a new source for capital, can lead to technological up gradation, skill enhancement and allocative efficiency effects. While FDI is expected to create positive impact on economy, it has also brought in certain negative impact on Indian economy during the past few years. The present study is conducted to study the relationship and analyze the impact of FDI on Indian economy. Flow of FDI for the past 15 years was taken for study( 2000-2015). The impact was studied by testing the correlation with the country’s GDP and Stock Market Indices. Sensex and Nifty were considered as the representative of Indian Stock Market. The study concludes that flow of FDI in to the country plays a dominant role in deciding the stock market movements.
Keywords: FDI, Indian Economy, Sensex, Nifty
JEL Classification: G15, G18
Suggested Citation: Suggested Citation