Impact of economic indicators on FDI: A case of India

It is known that the growth in FDI is increasing at the global scenario. Especially in the developing countries the FDI is increased in last two decades. The current study investigates the effect of the economic indicators on the Foreign Direct Investment in India.

The data of FDI, GDP growth, Consumer Price Index, Exchange Rate (US$) and Inflation (WPI) from 2000–2001 to 2010–2011 have been used for the purpose of study. Various statistical tools i.e., Mean, Standard Deviation, Variance, Kurtosis, Skewness have been used to check the normalcy of the data. Correlation and Regression analysis have been used to study the relationship and dependency of these variables.

The findings revealed that there is a visible effect of the economic indicators of India on the Foreign Direct Investment. The result of the correlation and regression analysis shows the significant impact of the economic indicators on the FDI.