Foreign Direct Investment in India: An Econometric Analysis (original) (raw)

AN ANALYTICAL STUDY OF FDI IN INDIA POST 2010

A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. Foreign direct investment (FDI) is generally considered as a key driver of global economic integration. FDI inflows are often seen as important catalyst for economic growth in the developing countries. The objective of this paper is to study the trends of FDI in India post 2010.it also identifies the sources of FDI in India. It also studies the impact of FDI on the growth of various sectors viz a viz agriculture, manufacturing and services sector. For pursuing the study relevant data is collected from various secondary sources. Further correlation & regression technique has been applied using SPSS to find out the results among the variables. The paper concludes that India is one of the top most sought after country for foreign investments because of high degree of specialization, inexpensive labour force and high potential market. Also it examines the relationship between foreign direct investment in agriculture, manufacturing and service sector with the gross domestic product in all the three sectors.

FOREIGN DIRECT INVESTMENT AND ECONOMIC GROWTH IN INDIA

Foreign Direct Investment (FDI) plays a very important role in the development of the nation. It is very much vital in the case of underdeveloped and developing countries. A typical characteristic of these developing and underdeveloped economies is the fact that these economies do not have the needed level of savings and income in order to meet the required level of investment needed to sustain the growth of the economy. In such cases, foreign direct investment plays an important role of bridging the gap between the available resources or funds and the required resources or funds. It plays an important role in the long-term development of a country not only as a source of capital but also for enhancing competitiveness of the domestic economy through transfer of technology, strengthening infrastructure, raising productivity and generating new employment opportunities. In India, FDI is considered as a developmental tool, which helps in achieving self-reliance in various sectors and in overall development of the economy. India after liberalizing and globalizing the economy to the outside world in 1991, there was a massive increase in the flow of foreign direct investment. This paper analyses FDI inflow into the country during the Post Liberalization period. Further, the trends of FDI inflow into the country are projected for a period of five years from 2010-11 to 2014-15 using Autoregressive Integrated Moving Average (ARIMA) forecasting technique. The paper tries to examine the various set of factors which influence the flow of FDI Identifying the causes for low inflow and suggestive remedial measures to increase the flow of FDI in India with that of other developing nations in the world.

A Study of Foreign Direct Investment & its Impact on Indian Economy

FDI plays a vital role for economic development of any developing country. The importance of FDI in India has increased significantly over the last two decades. FDI serves as a link between investment and saving. Many developing countries like India, are facing the deficit of savings. This problem can be solved with the help of Foreign Direct Investment. Foreign investment helps in reducing the defect of BOP and provides the base and pre requisite for rapid GDP growth. This study is entirely based on the secondary data. This paper makes an in-depth study to analyse the scenario of FDI and its impact on Indian economy. For this purpose empirical data are estimated for the period 1991 to 2014. For this purpose we use some useful statistical tools like correlation and linear regression analysis. For data analysis SPSS software has been used. And we conclude that there is significant effect of FDI on India's GDP.

“Foreign direct investment and economic growth in india: The emerging scenario”

2011

Previous researches have inferred that there is relationship between FDI and economic growth. Foreign direct investment increases the productive capacity of economy on one hand and influences the demand on the other side due to increase in the income level. Keeping in view the above said phenomenon, Government of India has abandoned its long held restrictive foreign investment policy in 1991, and sought to compete with the successful Asian economies to get a greater share of the world's FDI. The present study is undertaken to identify the emerging trends with regard to FDI and the impact of FDI on Economic Growth Parameters in India. The economic growth indicators selected for the study are gross domestic production, net domestic production, gross national product and net national product. The results of the analysis indicate that gross domestic product and gross national product increase to a large extent increase in the volume of FDI while other selected parameters also indica...

Trend of FDI in India and Its Impact on Economic Growth

Trend of FDI in India and Its Impact on Economic Growth, 2014

Foreign investments are the indispensable factors that help in boosting the growth of Indian economy. With the introduction of liberalisation policy under the finance ministry of Dr. Manmohan Singh in 1991 & with further few policy reforms, India has witnessed a change in the flow and direction of foreign direct investment (FDI) into the country. This paper has made an attempt to analyse the trend of FDI flow into the country and to find the relation between FDI, FII and GDP of the country. India has witnessed the increase in the flow of FDI from US $ 4029 million in 2001-01, to US$ 36396 million on 2013. Furthermore India has witnessed a year-on-year (y-o-y) growth of 24.2 per cent in FDI to touch US$ 3.95 billion in April-May 2013 as against US$ 3.18 billion during the same period in 2012. However, the analysis shows that the country is still far behind in comparison to some of the developing countries like China. The continuous upsurge in foreign direct investments (FDI), allowed across the industries and sectors, has proven that foreign investors have faith in the resilience of Indian markets. Furthermore, the study indicates that flow of FDI and GDP are positively correlated with each other and the country's GDP is showing a positive movement with flow of Foreign Direct Investment in India. The flow of FII and FDI also shows the positive correlation with each other.

An Empirical Examination of the Determinants of Foreign Direct Investment in India

Developing countries around the world needs huge capital for financing their strategic goals. Capital in the form of foreign direct investment (FDI) is the most favored destination for such countries. This paper examines the macroeconomic variable that act as determinants of FDI inflow into India. The potential FDI determinant is comprehensive, and includes variables proposed from literatures. The authors makes use of time series data for the period 2000-01 to 2011-12, and the study employs ordinary Least Square (OLS) method. Order of integrity for all the variables is I (1). Results indicate that among the selected variables, export, index of industrial production, inflation shows statistically significant at 5 % level.

A Study on Fdi Trends in India Since 2000

PARIPEX INDIAN JOURNAL OF RESEARCH

Since the liberalization of trade regulations, Foreign Direct Investment (FDI) has played a crucial role in the expansion of Indian economy, both at the macro and sector levels. The connection between FDI and economic expansion is a debatable subject worldwide. The volume of inflow varies due to a variety of regional, national, and global factors that affect investment choices. Critical policy changes and proactive decision-making demonstrated the government's exceptional resilience, which even helped to mitigate the pandemic's harm. The potential impact of FDI on important macroeconomic indicators is examined in this research paper. In order to analyze the trend of the economic route of future, the study shows the sectoral division of FDI influx. Understanding the divides and patterns helped to provide insight on how the economy was evolving. Changes to regimes are still being made by policymakers in an effort to attract FDI.