Vol: 7, Issue: 1 2017

Page: 11-20

Role of Foreign Direct Investment (FDI) on Growth of Indian Economy

D.Satyanarayana, Dr. G. V. Subba Raju, V. Rajasekhar Ryaly

Main objective of this paper is to explore the relationship between growth of the Indian economy and the Foreign Direct Investment in Indian Industries. Most of the countries in the world considered international economic integration as one of the most powerful tool to boost their economies and increase their Gross domestic Product (GDP). With tune of the other economies, Indian government also laid a major foundation stone for international economic integration with new industrial policy 1991. With this new Industrial policy and subsequent amendments in the related statutes provide the more liberalized policies to attract the Foreign. Direct Invest (FDI). This move has accelerated the growth, face of the Indian economy. Indian GDP has been increased from 274.8 billion US$ in 1991 to 2.384 trillion US$ for the year 2016, Per-capita income also increased from 310 US$ to 1,820 US$ during the period. Flow of funds in various industries like services, insurance, financial services, infrastructure and real estate served as catalyst for growth of the Indian economy. Political stability, steady growth of economy, single digit inflation rate, low cost trained manpower, infrastructure facilities, regulatory frame work, and government encouragement made the path very easy, solid for foreign players to invest in India, when compared to other countries. Flow of funds is increased in each and every sector which is allowed to invest by the foreign inventors. Number of foreign companies, foreign collaborations are increased in every sector. This urges me to take this study to investigate the influence of FDI on Growth of Indian Economy.