Main Article Content
Abstract
Foreign Direct Investment (FDI) plays a very important role in the development of the nation especially in the case of developing countries. Generally the developing nations are characterised by a low level of capital formation existence in the country because of low level of savings and income. The need of capital for the development of the country is highly required in a developing nations to ensure a sustain growth of the economy. The shortage of financial resources creates a wider gap between the demand and supply of financial resources in the nation. In such kind of situation, foreign direct investment plays a vital role through providing more funds in the form of capital which fill the gap between the required financial resources and the available resources.
It plays an important role in the long-term development of a country. FDI is not only consider as a source of capital but also for enhancing competitiveness of the domestic economy through transfer of technology, strengthening infrastructure, raising productivity and generating new employment opportunities. In India, FDI plays a vital role in the development of the country especially after the year 1991. With the advent of FDI, India’s GDP growth rate increased substantially in the past two and a half decades with an increase of decent per capita income of the citizens in the country.
In this paper, I made an attempt to study the growth of FDI in India in the last decade. This paper examines the set of various factors which determine the flow of FDI in the country. Sector-wise FDI flows over the past few years are also analysed and ranked the top ten attracting sectors of FDI in India.