An empirical analysis of inward flow of foreign direct investment into india

Foreign direct investment (FDI) is an important catalyst for economic development in emerging developing economies. By abandoning its long standing restrictive policy for foreign investors, India has welcomed FDI under the framework of economic liberalisation in 1991. The volume of FDI inflows into the country has grown up since 1991. This paper analyses the trend in the growth of FDI inflows into India covering a period of 18 years from 2000-01 to 2017-18. Further, this paper also examines the determinants of FDI inflows into India during the period of study by applying Multiple Regression Analysis. The findings of the study revealed that FDI inflows into India have grown up by 17.33 percent from 2000-01 to 2017-18. Further, India’s share in global FDI inflows has gradually increased in recent years. The estimated results of the multiple regression analysis revealed that real GDP, rate of inflation, debt-GDP ratio and corporate tax rate are the major determinants of FDI inflows into India during the period of analysis. The Real GDP and rate of inflation have positive impact upon FDI inflows into the country whereas the impact of debt-GDP ratio and corporate tax rate is found to be negative.