Foreign Direct Investment in India:An Overview

Foreign Direct Investment is an investment by a foreign Enterprise into any country other than its home country. FDI plays an important role in the growth and dynamics of a country. The development of a country depends upon the FDI inflow. FDI brings advancement in technology, increases production, increases capital inflow and introduces better managerial practices, etc. It also leads to export growth and industrial development. Small domestic enterprises also benefit from the incoming of FDI. India took its first step towards liberalization in 1991 after which FDI inflows increased substantially as compared to previous decades. This article talks about the inflow of FDI in India from 1981 to April 2016. This period has been divided into three sections-Pre-reform period (1981-1990) Post-reform period (1991-92, 2008-09) and the Recent period (April, 2010-2016). It shows the inflow of FDI and sectoral change in the FDI inflow during the pre-reform, post-reform and recent period. The various policy measures and steps taken by the government to increase FDI inflows in India during the post-reform period and government's recent policies and incentives being given to the foreign investors to increase FDI inflow is also a part of the article. The positive and negative impacts of FDI on India and its economy are also discussed in the paper.