Abstract

The study investigates the impact of India’s institutional quality on FDI inflows using panel data of the top 15 investing nations over the period 2008–2018. The study employs the augmented gravity model to identify FDI inflow determinants in India. The empirical results confirm that institutional quality has a positive impact on FDI inflows in India. The improved institutional quality and macroeconomic factors have played a vital role in attracting FDI in India despite BIT terminations. The study suggests that India must further strategize enhancing human capital and propose liberal labor policies facilitating FDI inflows equally in the manufacturing sector, promoting exports.

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