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.
This article attempts to empirically examine the relationship between FDI inflows and Total Factor Productivity (TFP). There are different types of factors of production; single or partial factor profitability.
The aim of this article is to investigate the impact of FDI inflows on the exports of India. The relationship between FDI and exports has been of great interest to researchers especially after the economic liberalisation in 1991.
Removal of trade barriers presented a massive opportunity for the foreign nations to foray into the Indian market. The local workforce also embraced the opportunity of FDI influx for making good fortune.
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).
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.).
As reviewed in previous articles, foreign direct investment (FDI), is an investment made by a foreign investor in a host country. Foreign investment is considered to be an integral part of an economy as it helps in accelerating the economic development.
Growth rate of India before the economic liberalisation was slow and was referred to as the “Hindu rate of growth”. With economic reforms in the 1990’s, the Indian economy not only allowed foreign investment but also shifted its approach from Socialist to Capitalist or market based approach. The growth rate has since accelerated, however India is way behind in terms of development index. Furthermore, climate change and environmental concerns have become a major concern for the world. As a result it will be a major challenge for India to balance between higher growth and the environment.