India highly depends on foreign investments in the form of foreign direct investments (FDI) to fund its economic growth (Demirhan & Masca, 2008). Amongst all the sectors, the manufacturing sector and service sector has undergone a transformation and experienced high growth rates in the past few years. However, from the data on FDI, it can be observed that few key industries belonging to these two sectors have boosted at a faster rate than the others and attracted more FDI than the others.
Foreign Direct Investment (FDI) has been one of the most critical factors in the economic health of emerging markets like India. It is the process of establishment of business or carrying out business activities in the host country by a foreign country. The Government of India had undertaken major reforms in the country’s FDI policies in 1991. The most recent policies allowed for increasing the FDI limit. Read more »
The inflow of foreign direct investment (FDI) in India has paved the path for the economical and financial development of a country. There has been significant increase in economic growth after the liberalization policies undertaken by India in 1991 (Nagaraj 1997). Though the journey to growth has not always been a smooth trend for India. However, the reformation has improved the gross domestic product (GDP) over the years. It has indicated sound growth especially in the recent years when the inflow of foreign capital has increased immensely (Sahni 2012).
Foreign Direct Investment (FDI) is an international flow of capital where a company or individual of one country makes an investment in another country. The main objective of such investment is to establish business operations which will generate a lasting interest in the investee economy (Goldberg, n.d.). Read more »
India is gaining importance globally as a rapidly developing economy. Investors from all over the world have shown faith in the flexible Indian economy. One of the major factors for rapid economic growth in India after 1991 can be attributed to the huge inflow of foreign capital. There are various determinants which led to such huge capital inflow in India. A political and legal system is one of the key factors. Read more »
The post reform period being the prospective period for strengthening the base of the Indian economical sectors for its growth with liberalization policy. This has increased the expectations of the foreign investors pursuing them to invest in different sectors of India. Also, progressive policies towards liberalisation made the Indian economy a lucrative market to invest. Factors such as, reinforcing the confidence of the investors have further added prospects to the growth of the Indian economy as a whole (Akhtar 2013). There are various determinants which have led to higher inflow of foreign investment in India. Read more »
The service sector is one of the fastest growing sectors in India. Contribution of this sector in gross value addition in Indian economy was 52.97% during the financial year 2014-15 (Planning Commission 2015). India witnessed a rapid expansion in this sector after the liberalisation of the economy in 1991. The main reason for such rapid growth is due to the huge knowledge base and high inflow of foreign investment (Mukherjee 2013). Foreign direct investment has a great role to play in the overall development of the Indian economy. It brought technological gradation with it and encouraged the growth of several sectors including the service sector (Sirari & Bohra 2011). Read more »