Role of FDI in Indian economy

This paper attempted to make an analysis of FDI in India and its impact on growth. It also focuses on the needs and determinants of FDI, year-wise flow of FDI to India, its analysis and sources of FDI and reasons. Foreign direct investment (FDI) policies play a major role in the economic growth of developing countries around the world. Attracting FDI inflows with conductive policies has therefore become a key battleground in the emerging markets. One of the most striking developments during the last two decades is the spectacular growth of FDI in the global economic landscape. One of the economic aspects of globalization is that increasing investments in the form of foreign direct investments. Due to the global recession most of the countries have not been able to pull investments. India has been able to attract better FDI's than the developed countries even during the crisis period also. Especially in the recent years the FDI in India has been following a positive growth rate. Since 1991 the government has focused on liberalization of policies to welcome foreign direct investments. These investments have been a key driver for accelerating the economic growth through technology transfer, employment generation, and improved access to managerial expertise, global capital and distribution network. FDI in India has enabled to achieve a certain degree of financial stability; growth and development to sustain and compete in the global economy. Mainly three objectives are involved in this study. The tools used for this study is percentage analysis.