ROLE OF FOREIGN DIRECT INVESTMENT (FDI) IN THE DEVELOPMENT OF INDIAN ECONOMY

Abstract

Economic growth and development are significantly promoted by foreign direct investment (FDI). For a country like India, FDI has been instrumental in transforming various sectors, creating jobs, and fostering technological advancements. By continuing to attract and manage FDI effectively, India can further accelerate its journey towards becoming a global economic powerhouse. In addition to being a vital instrument utilized in the international market today, FDI is a major component that encourages investors to enter the economy. FDI has also affects local businesses with exporting activities, manufacturing firms' exports are also increased by it. Trade between the host nation and FDI is impacted both directly and indirectly. The support of Foreign Direct Investment (FDI) can facilitate the endorsement of new paradigms in marketing channels, as well as easy access to technology, product skills, and financing.Foreign capital is seen as a means of bridging the gap that occurs when domestically available capital is insufficient for the goal of the nation's overall development.The focus should be on creating a balanced approach that maximizes the benefits of FDI while mitigating potential risks.The current work explores the role that foreign direct investment (FDI) in the development of the Indian economy.Additionally, the study looks at FDI inflow by sector, by country, and by State/UT. The connection between GDP contribution and foreign direct investment is also examined.