Trends of Foreign Capital and Foreign Investment in India

In an era of liberalization, privatization and globalization there has been a continuous flow of man, money, and material through out the globe. The flow of long term capital has become the most determining factor for the economic changes in the recent times. Almost every developed country of the world in its initial stages of development had made use of foreign capital to make up the deficiency of domestic saving. Foreign capital has played an important role in the economic development of India. Foreign capital had started flowing in India from a long time back i.e. East India Company. But that time the policy relatives to foreign capital were favorable to foreign capitalist and against India. After independence, foreign capital and investment was used as a tool for promoting economic development and to make balance of payment favorable.