Foreign Direct Investment (FDI) in India: A Trend Analysis

Consistent economic growth, deregulation, liberal investment rules and operational flexibility are all the factors that boost the inflow of foreign direct investment or FDI. FDI is any form of investment that earns interest in enterprises, which function outside the domestic territory of the investors. FDIs require a business relationship between a parent company and its foreign subsidiary. Foreign direct business relationships give rise to multinational corporations. For an investment to be regarded as an FDI, the parent firm needs to have at least 10% of the ordinary shares of its foreign affiliates. The investing firm may also qualify for an FDI if it owns voting power in a business enterprise operating in a foreign country. The main objective of the research paper is to examine, which sector is preferred by MNCs for investment and the participation of countries. It is concluded that the contribution of Mauritius and Singapore is the foremost in FDI in India. The contribution of FDI of most of the leading countries has gone down in 2010–2011 as compared to the previous year, which is significantly of greater concern.