Abstract
Abstract
Globalization has led to a surge in foreign direct investment (FDI) in Asian developing countries in recent years. Despite being a latecomer to FDI compared to other East Asian nations, India's vast market potential and liberalized political environment have made it an attractive destination for foreign investors. This research paper aims to examine the impact of FDI on the Indian economy, especially after two decades of economic reforms, and analyses the challenges posed by the position in the global competition for FDI. The paper provides the main policy implications of this analysis, in addition to highlighting the complexities in interpreting India's FDI data. Foreign Direct Investment (FDI) has played a crucial role in fostering economic growth and development in India, garnering significant interest from politicians, investors, and researchers alike. This article provides a thorough examination of the diverse effects of Foreign Direct Investment (FDI) on the Indian economy. This study examines the impact of foreign direct investment (FDI) on key macroeconomic indicators, including GDP growth, employment, technology transfer, export competitiveness, and industrial development. It draws on a range of empirical studies, policy documents, and theoretical frameworks. Furthermore, it explores the specific dynamics of several sectors, analysing the impact of foreign direct investment (FDI) on industries such as manufacturing, services, and infrastructure. In addition, the essay examines the socio-economic consequences of foreign direct investment (FDI), investigating its effects on the distribution of income, the reduction of poverty, and the promotion of sustainable development. Moreover, it evaluates the influence of regulatory frameworks, institutional capacities, and government policies on the FDI landscape in India. This article enhances our awareness of the intricate connection between Foreign Direct Investment (FDI) and India's economic path by analyzing existing literature and providing valuable insights. As a result, it can guide future policy choices and strategic investments in the country.