The Indian economy witnessed a high FDI inflow after the reform of economic liberalization. The increasing trend continued in the last financial year 2017-18. This increase can be attributed to factors such as the high rate of GDP growth, low inflation rate, exchange rate, trade openness and economic and political stability.
Economic performance of a country is measured by economic growth and the most commonly used indicator for economic growth of a country, its Gross Domestic Product (GDP) or Gross National Product (GNP). GDP is the aggregate value of all final goods and services produced in the domestic territory of an economy or a country in a certain period of time.
Indian liberalisation began in early 1990s’ leading to gain in momentum of foreign direct investment inflows into the country. However it was only after 2000 that the investment became significantly higher (Bibek Rya Chaudhuri, Pradyut Kumar, 2013).
Foreign direct investment has been recognized as an imperative driver of economic growth and development. One of the most prominent developments during the last two decades is the spectacular growth of foreign direct investment in the global economic scenario.