Abstract
Ever since the liberation of trade policies in India, Foreign Direct Investments (FDI) has been crucial in the growth of the economy, both at the macro as well as sector level. The association between FDI and economic growth is an area of interest globally. The investment decisions are affected by several national and international events that add to the volatility of the number of inflows. COVID-19 pandemic severely impacted the intensity of FDI inflows. But the strong resilience by our government manifested in crucial policy reforms and proactive decision-making minimized the impact. This article examines the potential impact of FDI on crucial macroeconomic variables using the Computable General Equilibrium (CGE) Model. Introducing the policy shock of $90 billion into the model, an increase of 5.68% per annum in GDP is estimated. Findings indicate that the impact of FDI shall be favourable to a large number of sectors mainly metals, construction, motor vehicle, computers, and electronics in terms of increased output, exports, and employment opportunities. The study offers logical implications for the policymakers to continue strengthening their moves to attract FDI.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
