FDI- Impact on host country

Abstract

The Foreign Direct Investment Policy 2016 give us a clear intention and objective of the Government of India that is to attract and promote foreign direct investment in order to supplement domestic capital, technology and skills, for accelerated economic growth. Foreign Direct Investment, as distinguished from portfolio investment, has the connotation of establishing a ‘lasting interest’ in an enterprise that is resident in an economy other than that of the investor. It goes without saying that preference for foreign direct investment has risen because it contributes in developing an extraordinary and growing role in global business. The host country where the foreign country is investing upon becomes the recipient of not only the investment, but also provides source of new technologies, capital, processes, products, organizational technologies, management skills, and as such becomes a boon for the sought after economic development. These factors give ample reasons to allow foreign direct investment to be viewed as a fundamental part for an open and successful international economic as well as market system. The research paper here tries to bring forth the socioeconomic development brought significantly by foreign direct investment through various channels.