An Empirical Analysis of Impact of FDI on India’s GDP

Abstract

The initial entry of FDI in India can be loosely considered from the time of establishment of East India Company of Britain during the colonial era in the 17th century due to the British merchants approaching the Mughal Emperor with the proposal of establishing a factory in Surat city of India. Along with them the British brought on the Industrial revolution to India which led to development of transportation (Railways and Roadways) and communication systems albeit for their benefits.

As India is a developing country, capital has been one of the scarce resources that are usually required for economic development. Capital is limited and there are many issues such as Health, poverty, employment, education, research and development, technology obsolescence, global competition. The flow of FDI in India from across the world will help in acquiring the funds at cheaper cost, better technology, employment generation, and upgraded technology transfer, scope for more trade, linkages and spillovers to domestic firms.