An analysis of foreign direct investment with reference to SMEs in India

The fast and steadily growing economy of India in majority of its sectors, has made India one of the most famous and popular destinations in the whole world, for Foreign Direct Investment. According to a recent survey by the United Nations Conference on Trade and Development (UNCTAD), India has conspicuously emerged out as the second most popular and preferable destination in the entire world, after China, for highly profitable foreign direct investment. FDI complements and supplements domestic investment. The small and medium enterprises (SMEs) would be benefited through FDI, by way of enhanced access to supplementary capital & state-of-the-art technologies, exposure to global managerial practices and technologies as well as opportunities for integration into global markets. Attracting foreign direct investment has become an integral part of the economic development strategies for India. FDI ensures a huge amount of domestic capital, production level, and employment opportunities in the developing countries, which is a major step towards the economic growth of the country. This Research Paper makes a modest attempt to analysis the impact of foreign Direct Investment on SMEs. Analysis also tried to find out and make an assessment of the possible impact of the opening of FDI in retail on SME in terms of different growth indicators/parameters like Sales, Size of the industry, Capacity expansion.