Impact of FDI on India
Last Updated: Apr 2, 2025
Foreign Direct Investment(FDI) is a vital ingredient of the globalization efforts of the world economy. The impact of FDI on India has left an impression. Economic and technological forces drive the growth of international production. Governments and institutions also drive this growth by liberalizing
A notable feature of the present-day world is the circulation of private capital flows as FDI in developing countries, especially since the 1990s.
Multinational corporations (MNCs) have emerged as major actors in globalization since the 1980s.
Governments worldwide attract MNCs to invest in their countries.
This trend is part of a broader liberalization context, where developing countries have adopted market-oriented strategies.
Globalization offers developing countries like India a chance to achieve rapid economic growth through trade and investment.
Top Foreign Investors in India
In the 1970s, international trade grew more rapidly than FDI, and thus international trade was by far the most important other international economic activity. This situation changed radically in the middle of the 1980s, when world FDI started to increase sharply. In this period, the world FDI has increased its importance by transferring technologies and establishing marketing and procurement networks for efficient production and sales internationally (Shujiro Urata, 1998).
But nowadays, it seems that the impact of FDI on India is a negative one. From a position of 8th rank in 2009 India has fallen to 14th position as a country attracting the largest FDI, according to “World Investment Report 2011” by United Nations Conference on Trade and Development (UNCTAD). Developing countries like Singapore, Thailand, Taiwan, Malaysia etc. are attracting a higher FDI inflow than India. A number of studies and reports highlight the weakness of India as a falling FDI destination. In the latest study from the World Bank, “Ease of Doing Business in India 2011,” India is ranked as 134 out of 183 countries. GD on the impact of FDI on India can have different faces.
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6 Responses to Impact of FDI on India
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There has been a long discussion on this topic. Like everything which has been introduced , it also has its pros & cons!
i think FDI has good effect on economy of India….as it provide a platform to participate in the global world….
It is good but not be in every sector..It will Increase the unemployment rate also..
FDI can really shoot up the Indian economy and put the unemployment to a minimum…
FDI will, on one hand cause a golden chance for the Indian market to appear at global platform whereas snatch the bread and butter of many self employed entrepreneurs.
FDI…why cant we turn it into IDI(India direct investment)
arent we capable enough ??
we should develop on our own…our INDIA is lrready doing soo good in every field 🙂