Foreign Direct Investment In India Since 1991: Trends, Challenges And Prospects

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FDI is more attractive in compare to other forms of external finance since it is non-debt creating, non-volatile and the returns depend on the performances of the projects financed by the investors (Planning Commission, 2003). With the introduction of new economic policy in 1991 and subsequent reform process, India has witnessed a change in the flow and direction of FDI into the country...
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With the introduction of new economic policy in 1991 and subsequent reform process, India has witnessed a change in the flow and direction of FDI into the country. This is mainly due to the removal of restrictive and regulated practices. Regarding impact of FDI in the economy of developing countries economists like Griffin, Singer and Weisskof found a negative impact while, economists like Chenery and Strout found favourable effect of foreign capital inflow on the economic efficiency and growth towards the developing countries (Mathiyazhagan, 2005)...
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