Impact of foreign direct investment on Indian banking sector-An overview

Foreign direct investment has multiple effects on the economy of India. FDI influences the production, income, employment, exports, prices, imports, balance of payments, general welfare, and economic growth of the receiving economy. The reasons, motivating foreign direct investment in other countries, are constantly being studied. There are innumerable factors motivating this type of investment and it is more complicated when the investment comes from a developed country to a developing economy such as India. Several empirical studies have drawn considerable attention on the determinants of foreign direct investment in the E.C. Relatively fewer attempts have been made to model and empirically examine foreign direct investment in the developing countries. Rising interest rate environment has adversely affected the banking sector.