Implications of financial sector reforms for FDI in India

The financial sector reforms and globalization of Indian economy in 1991 invited many Foreign Institutional Investors to India. The global economy focused its concentration on India's economy and found viable earning domains in India. This induced the rapid increase in Foreign Direct Investments (FDI) in India and mutual economic developments of foreign countries and India. Several research papers clearly noted the implications of financial sector reforms in the Indian Capital Market, the growth of IT, steel and pharmaceutical industries. The changes in Primary, and Secondary Market, their respective instruments and the changes in their return on investments are predominant in determining the potentiality of FDI in India. The main aim of this research article is to explore the factors influencing Foreign Institutional Investors (FII) to invest in various portfolios in Indian Capital Market. In particular, the total investment, total assets and total sales in Indian Capital Market are analyzed systematically. The study is based on Secondary Data. Trend Analysis, and Numerical Cluster Approaches were systematically employed to analyze the flow of FDIs in the span of 10 years since1998.