An Empirical Analysis Of The Regional And Industrial Distribution Of Foreign Direct Investment And Economic Growth In India

Abstract

  The main objective of this paper is to study in-depth the trends and impact of FDI on economic growth at regional and industrial level. The findings indicated that although Andhra Pradesh saw a notably favorable influence from FDI on economic development, its growth rate remained lower owing to a declining trend in FDI inflows compared to other areas. Consequently, a comprehensive policy at both the national and state levels must be developed to guarantee a more fair allocation of FDI inflows, enabling disadvantaged states to gain as well. The effect of FDI inflows on the automobile industry was favorable and large; yet, its growth rate was lower than that of twenty other sectors owing to greater data swings throughout the years. Consequently, the Government should overhaul its whole framework, mitigate entrance hurdles, and provide improved and open information about policy laws and procedures in underprivileged industries. In summary, foreign direct investment inflows are important for a growing country such as India, and in this dynamic global landscape, no nation can thrive in isolation. Currently, governments have no alternative but to liberalize their economy in conjunction with the global community. Foreign Direct Investment cannot be disregarded despite its many adverse consequences. Given the conditions, it is prudent to comprehend the hazards, formulate regulations appropriately, and address the issues of FDI.