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Topics: Investment, Macroeconomics, Foreign direct investment Pages: 18 (3223 words) Published: April 7, 2014
RESEARCH INVENTY: International Journal of Engineering and Science ISSN: 2278-4721, Vol. 1, Issue 5 (October 2012), PP 34-42
www.researchinventy.com

Role of Foreign Direct Investment in India: An Analytical Study 1

Dr. Jasbir Singh,2Ms. Sumita Chadha,3 Dr. Anupama Sharma
1

Associate Professor, Maharaja Surajmal Institute, Janakpuri, Delhi Assistant Professor, Maharaja Surajmal Institute, Janakpuri, Delhi 3
Assistant Professor, Maharaja Surajmal Institute, Janakpuri, Delhi 2

Abstract: International Economic Integration plays a vital role in Economic Development of any country. Foreign Direct Investment is one and only major instrument of attracting International Economic Integration in any economy. It serves as a link between investment and saving. Many developing countries like India, are facing the deficit of savings. This problem can be solved with the help of Foreign Direct Investment. Foreign investment helps in reducing the defect of BOP. The flow of foreign investment is a profit making industry like insurance, real estate and business services and serving as a catalyst for the growth of economy in India. The present study is based on the objectives like (a) to know the requirement of amount of foreign investment by India, for its economic Development and (b) to analyze the trend and role of FDI & FIIs in improving the quality and availability of goods has been beyond doubt. To analyze all these objectives data has been gathered through secondary sources like reports and publication of Govt. and RBI relating to foreign Investment. After analyzing all the facts it may be concluded that maximum global foreign investment’s flows are attracted by the developed countries rather than developing and under developing countries. Foreign investment flows are supplementing the scare domestic investments in developing countries particularly in India. Further this paper recommends that we should welcome the inflow of foreign investment because it enable us to achieve our cherished goal like making favorable the balance of payment, rapid economic development, removal of poverty, and internal personal disparity in the development and also it is very much convenient and favorable for Indian economy.

Key Words:- Foreign Direct Investment, Foreign indirect investment, Internal Personal Disparity, Portfolio Investment Policy, Balance of Payment

I Introduction
Foreign investment plays a significant role in development of any economy as like India. Many countries provide many incentives for attracting the foreign direct investment (FDI). Need of FDI depends on saving and investment rate in any country. Foreign Direct investment act as a a bridge to fulfill the gap between investment and saving. In the process of economic development foreign capital helps to cover the domestic saving constraint and provide access to the superior technology that promote efficiency and productivity of the existing production capacity and generate new production opportunity.

II
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Objectives of Study

To study the significance of FDI for developing countries in bridging the gap between the saving and Investment.
To analyse the trends of FDI & FIIs in the recent past in developing country like India after economic reforms.
To study the impact of FDI & FIIs in improving the quality and availability of goods has been beyond doubt.
To know the requirement of amount of foreign investment by India, for its economic Development.

III

Research Methodology

The present study is based on the objectives like how much amount of foreign investment is required for India‟s economic growth and to analysis the trend of FDI & FIIs for economic development and how the status of economy has improved after economic reforms. To fulfill all above said objectives data has been gathered from secondary sources like reports and publication of Govt. and RBI relating to foreign Investment, economic journals, books, magazines and...

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