Foreign Direct Investment in India: Macroeconomic Determinants and Economic Growth

Open Access
Author:
Singh, Nimarjit
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Stephen Ross Yeaple, Thesis Supervisor
  • David Shapiro, Honors Advisor
Keywords:
  • Foreign Direct Investment
  • economic growth
  • fdi-gdp
  • fdi-exports
  • indian economy. FDI in India
Abstract:
This thesis seeks to examine Foreign Direct Investment (FDI) in India. I aim to present an understanding of the concept of FDI, the various theories of FDI, and analyze the trends of FDI in India along with the historical evolution of FDI policy from independence till the present day. I will examine the sectoral composition of FDI in India, regional distribution of FDI within India and the source countries of FDI. Through empirical analysis I seek to study the macroeconomic determinants of FDI inflows in India. The macroeconomic variables used in the analysis are: the exchange rate, external debt as a percentage of Gross Domestic Product (GDP), foreign exchange reserves as a percentage of GDP, annual inflation, and trade openness. I will also seek to examine the relationship between economic growth (GDP) and FDI, and exports and FDI.