Growth and Instability in Foreign Direct Investment Inflows to India Since 1991

With the introduction of new economic reforms in 1991, there has been a significant increase in the intensity of foreign direct investment (FDI) inflows to India which shows the liberal policy regime and increase in the confidence of investors with the passage of time. The purpose of this study is to identify the trend, growth and instability of FDI inflows to India in the wake of economic liberalisation and deregulation. This paper lays down the analytical framework for empirically testing the annual rate of, the compounded annual growth rate and instability associated with the flow of FDI to India since the initiation of economic reforms in 1991. Through employing regression analysis, the results show that FDI is increasing with a growth rate of 19.31 % which is highly significant with a falling growth in the instability of FDI inflows to India which is -1.42655 %.