Influence of Foreign Institutional Investments on Indian Economy

Foreign Institutional Investors (FII'S) are institutions who invest in foreign securities. The FII's have been playing significant role in the Indian stock market (Stanley Morgan, 2002). India opened its market to the world after liberalization. This helped in attracting foreign investors and also helped in better capital formation in the country. FII gives remarkable benefit to the economy as they are the best source with less cost of capital in the emerging market. Hence the objective of this study is to measure the influence of FII on selected economic indicators. Data has been taken for the period between 2001 to 2014 from the websites of ministry of finance, SEBI, BSE, NSE and World Bank. Descriptive statistics, Regression and correlation have been used to measure the relationship among the variables. Study identifies that FII has major influence on selected economic parameters of India.