FDI INFLOWS INTO INDIA AND THEIR IMPACT ON SELECT ECONOMIC VARIABLES USING MULTIPLE REGRESSION MODEL

The 21st century has witnessed a tremendous flow of international investment, trade and financial transactions along with the integration and openness of international market across the globe. The developing countries are trying to attract foreign capital to boost up their domestic rates of investment and also to acquire new technology and managerial skills. Foreign Direct Investment (FDI) is a long term investment made by a firm or individual in one country with all the risks and profit opportunities. It is an outcome of the mutual interest of multinational firms and host countries. Free flow of FDI eventually attracts huge foreign exchange, promotes industrialisation and international trade, enhances the GDP and Per Capita income and accelerates the socio-economic development of people and the nation as a whole. In the context of India, introduction of LPG on one hand and proactive and positive mind set of the planners on the other have further opened the economy for free inflow and outflow of investment into its different sectors. India is also considered, as the best investment destinations even by the trade block economies. Besides, free flow of FDI is considered as an indicator for economic development that results in increase in GDP, leads to trade openness, generates huge employment, enhances per capita income, boosts exports, and reduces wholesale price index and also exchange. Though scores of studies were carried out on FDI but studies on FDI inflows and their impact on the select economic variable using Multiple Regression Model are very scarce and scanty. The current study is an attempt to fill this gap. Keywords: Foreign Direct Investment, GDP, Multiple Regression Model, Economic Development