FOREIGN DIRECT INVESTMENT: IMPACT ON INDIAN ECONOMY

With the commencement of the New Economic Policy, 1991, developing countries, particularly those in Asia, have been observing an immense efflux of FDI inflows during the past two decades. The developing and the underdeveloped economies do not have the sufficient level of savings and income in order to meet the required level of investment needed to assist the growth of the economy. In such cases, FDI plays a pivotal role in bridging the gap between the available resources and the required resources. FDI provides a boost to the working of the economy. FDI is considered as a development tool in India which helps in attaining self-reliance in various sectors and also in the overall development of the economy. This paper aims to examine the impact of FDI on the Indian economy, particularly after the economic reforms.