Foreign direct investment – opportunities and challenges for India

India, the capital deficient country needs more capital from outside the country. Capital is one of the significant elements of factors of production. The industrial development of any country fundamentally depends on the availability of capital. Because of shortage of capital, particularly, underdeveloped and developing countries need more capital for their survival and technology for competing with other countries. Inadequacy of capital is a foremost obstacle for industrial growth of developing nations. The role of Foreign Direct Investment (FDI) is very much a significant in the economic development the country. The amount of FDI, compared to China and other developed countries is quite less. The Indian Government has reviewed policy to attract more FDI and these policy measures boosted the FDI inflows and out flows. But in the recent years, the amount of FDI has been declining. The procedures for FDI approval, environmental clearance, legal aspect, etc., are time consuming. In this paper attempt is made to analyze the direction and impact of FDI on the Indian economy. The study is based on the secondary data and information.