Role of FDI in the development of Indian economy

Abstract

The decade of 80′s emerged as a beginning of the high rate of economic growth or at least a dramatic departure from the past growth performance. This tendency had continued in the nineties and further growth stimulus has occurred in the early 21st century. Foreign direct investment is an investment made by a foreign individual or company in productive capacity of another country. It is the movement of capital across national frontiers in a way that grants the investor control over the acquired asset. India has been became most preferred nation for investment point of view for the foreign individuals and institution. It is so because of getting the status of third-largest economy of the world. Liberalized policy of Indian government has reduced the restriction significantly regarding foreign investment in Indian economy. As per the liberalized FDI policy of India foreign individual or institution can make investment up to 100% in Venture. After liberalization a number of changes were approved on the FDI policy to remove the cap in most of the sectors. Restrictions will be relaxed in sectors as diverse as civil aviation, construction development, industrial parks, commodity exchanges, petroleum and natural gas, credit-information services, Mining etc. In the eyes of foreigner investor India has bright future because of its vast market for every product, increasing impact of consumerism and absence of control and licenses