Impact of Foreign Direct Investment on Indian...

Impact of Foreign Direct Investment on Indian Economy

Author Name : Dr. Savita Trivedi, Ms. Shabnam. S

ABSTRACT Foreign Direct Investment is the investment made in production or business by the country in another country by either means of buying a company or expanding its business in the foreign country. It is usually by means of bonds and shares. Basically the term FDI refers to capital inflows from abroad that invest in the production capacity of the economy and are usually preferred over other forms of external finance because they are considered to be non-debt creating, non-volatile and also their returns depend on the performance of the projects financed by the investors. FDI also initiates international trade and transfer of knowledge, skills and technology. There are many factors that influence the economic conditions one of them is FDI. Hence there is a need to study the impact of FDI on the changes in economy. The Central Government radically liberalized the FDI regime, with the core objective of providing major impetus to employment and job creation in India. In the light of the above the paper highlights main features, policies, and flow of FDI. It also highlights the manner in which FDI has affected the growth of various states.