Foreign Direct Investment In India And Its Impact

Abstract

Foreign Direct Investment is a cross border investment into manufacturing or business in one country by a company in another country either by expanding existing business or by buying a new business in the host country. This occurs when one foreign company purchases another business or establishes new operations for an existing business in a country other than own country. Duos to fast population growth in developing countries, good opportunities have been created for foreign companies to invest in these countries and enjoy the low cost of manufacturing. India as the second largest destination for FDI after China has became more important economically for foreign companies. In addition, FDI is one of the most significant pillars of the Indian economy accounting for 14 to 15 percent of its GDP. The question that arises here is, whether foreign investment improves a developing economy or is it only beneficial for foreign investors. In this article we will see the impact of FDI in different domain and how it improves the economy of the host country.