Foreign Direct Investment in India- (FDI): Trends and Insight

Abstract

After independence, Indian foreign trade has made cumulative progress both quantitatively and qualitatively. Though the size of foreign trade and its value both have increase during post independence era, this increase in foreign trade cannot be said satisfactory because Indian share in total foreign trade of the world have a remain remarkable low. In 1950 the Indian share in the total world trade was 1.78% which come down to 0.6% in 1995.

FDI being a non -dept capital flow is a leading source of external financing, especially for the developing economy. It not only being in capital and technical know-how but also increasing the competitiveness of the economy. Overall it supplements domestic investment, much required for sustaining the high growth rate of the country. Since 2000, significant changes have been made in the FDI policy resume by the government to ensure that India become an increasingly attractive and investor- friendly destination. In recent years, services, construction, telecommunications, computer, software and hardware, drugs and pharmaceuticals, automobiles industry, power metallurgical industries, and hotel and tourism are sector that have attracted maximum FDI inflows.                 

Keywords: Foreign Direct Investment (FDI), Economic Growth, Liberalization Policies, Sectoral Distribution, Investment Inflows,