An Analytical Study on Role of Foreign Direct Investment in India

The development of any country's economy depends greatly on international economic integration. In order to encourage international economic integration, foreign direct investment is the one and only key tool available. Between investing and saving, it acts as a bridge. There is a savings gap in many developing nations, including India. With the aid of foreign direct investment, this issue can be resolved. A profitable sector like real estate, business services, and insurance is the flow of foreign investment, which is a driving force behind India's economic expansion. The purpose of the current study is to determine the level of foreign investment that India will need for the development of its economy and to examine the impact that FDI have unquestionably played in raising product quality and availability. Data was acquired for the analysis of all three goals from secondary sources, such as government and RBI publications and reports on foreign investment. It is possible to draw the conclusion that developed countries, as opposed to developing and underdeveloped nations, attract the majority of global foreign investment flows. In developing nations, particularly India, foreign investment flows are boosting the inadequate local investments. Further, this paper suggests that we should encourage foreign investment because it helps us achieve our desired goals, such as improving the balance of payments, accelerating economic growth, eliminating poverty, and reducing internal personal disparities in development. It is also very beneficial and advantageous for the Indian economy.