FDI inflows: a pre and post reform analysis in Indian scenarino

FDI has played a vital role in the growth and development of Indian economy. Our GDP has been grown fourfold since the year 1991. India is the 10^th largest economy by nominal GDP, 3l^rd argest in purchasing power parity and 4^th most attractive investment destinations in the world, keeping these all in view, FDI is serving as a major source of finance. Thus FDI acts as a catalyst for domestic industrial development and considered to be an important vehicle for economic welfare race for a developing country like India. In this context the paper provides an understanding of emerging patterns in FDI inflows-outflows of India during pre and post reform period. During pre liberalization period FDI increased at CAGR of 19.05% while during post reform period it has grown 24.28%. Since 1991 FDI inflows in India has increased approximately by more than 168 times. Thus the paper analyses the evidences which show that FDI inflows and outflows are rising at much faster pace during post reform period compared to pre reform period. During 1991–92 FDI inflows in India were just 409 crores which converted into 123025 crore in 2008–09. Today upto 100%FDI is allowed in single brand retail and 51% in multi brand retail trading in India. Thus paper will focus on empirical findings indicating that policy reforms has positively contributed to the FDI inflows as well as outflows from India during post reform period.