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THE IMPACT OF FOREIGN DIRECT INVESTMENT ON THE INDIAN ECONOMY
Dr.Anil Nath
Abstract:
Foreign direct investment (FDI) started to become important to the world economy after the Second World War. Theoretical research on foreign direct investment has advanced our knowledge of the economic mechanism and the behaviour of economic agents at both the micro and macro levels, opening up a new area of economic theory study. Since the implementation of the liberalisation strategy under Dr. Manmohan Singh's finance ministry in 1991, India has experienced a change in the volume and direction of foreign direct investment (FDI) into the country. Economic growth over the long term is facilitated by foreign direct investment (FDI). MNCs aid domestic companies in the transfer of technology. Within the business, there is organic growth or expansion. Because FDI is less erratic and flows to the stock and bond markets, it is preferred over FII, sometimes known as "hot money." The stock market expands and draws in more capital as a result of the strong economic growth brought on by FDI, which also assists businesses by helping them to raise more money.