Impact of Foreign Direct Investment Inflows on the Growth of Indian Economy

It needs little look that India’s international competitiveness today crucially depends upon the growth and technological dynamism that it adopts. Economic policymakers, therefore, pave out their way to attract Foreign Direct Investments (FDI), as a great level of FDI is viewed as a catalyst and accelerator of economic growth for the host country. This paper thus examines the two most important benefits associated with the inflow of FDI for the host country in the form of: Export Promotion and GDP Growth. To review and study the dynamics of integration between FDI, GDP and Exports; evidence is taken from country-specific level like Indian Economy where the period of study is from 2000-2012. As FDI inflow can have a two-way impact on the host country, hence, the paper examines the current economic scenario of India in terms of its FDI inflows, GDP growth rate and its export performance so far.