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Asian Journal of Research in Business Economics and Management
Year : 2012, Volume : 2, Issue : 4
First page : ( 130) Last page : ( 144)
Online ISSN : 2249-7307.

Trends and pattrens of FDI in India and ITs economic growth

Mr. Goel Shashank*Ph.D Fellow, Mr. Kumar K. Phani**Assistant Professor, Prof. Rao K. Sambasiva***

*Indian Institute of Foreign Trade, New Delhi.

**School of Management Studies, Vignan University, Guntur, A.P., India.

***Department of Commerce & Management Studies, Andhra University, Vizag, A.P., India.

Online published on 10 April, 2012.

Abstract

With the initiation of new economic policy in 1991 and subsequent reforms process, India has witnessed a change in the flow and direction of foreign direct investment (FDI) into the country. This is mainly due to the removal of restrictive and regulated practices. Foreign direct investment in India increased from US $ 129 millions in 1991–92 to US $ 40,885 million in March, 2005, and US$ above 1, 00,000 million in 2010 an increase of about 1026 times. However, the country is far behind in comparison to some of the developing countries like China. In so far as growth trend of FDI is concerned, there has been quite impressive growth of FDI inflow into the country during this period. However, negative growth rate is noticed during the period 1998–2000 primarily due to falling share of major investor countries, steep fall of approval by 55.7% in 1998 compared to 1997 and slackening of fresh equity. However, traditional industrial sectors like food processing industries, textiles, etc. which were once important sectors attracting larger FDI, have given way to modern industrial sectors like electronics and electrical equipments, etc. In this paper analyze the FDI flows in the country and also is discussed the direct proportionate of the economic growth of the country.

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Keywords

Economic growth, FDI, Capital, Financial markets, reforms.

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