Revisão do Jornal Árabe de Negócios e Gestão

A Study on the Changing Trends in the Flow of FDI

Abstract

Sirisha S and Malyadri P

Foreign Direct Investment (FDI) is considered as an engine of economic growth. Foreign investment was normally permitted only in high technology industries in priority areas and in export oriented areas. So the inflow of FDI before 1990’s was very low. During early 1990s India suffered from massive balance of payment and foreign exchange crisis, which led Indian Government to opt for liberalized economic policies in 1991. Globalization and liberalisation brings lots of new innovative products to the world, Foreign Direct Investment is the one among this, also there are number of different forms of FDI is available currently. Recently, Government of India allowed FDI in different sectors of Indian economy. Since the adoption of New Industrial Policy (NIP) and on-going reform process, (FDI) inflows have increased substantially. On this background, the paper analyses the sector wise and country wise inflows of FDI during the period 2009-2014. This paper begins by reviewing possible sources of FDI and then provides a comprehensive evaluation of the empirical evidence on sector wise FDI. This study is entirely based on secondary data. It also point out the sector-wise distribution of FDI inflow to know about which has concerned with the chief share. The present study is based on secondary data collected from different sources. The paper concludes that the Government should design the FDI policy in such a way where FDI inflows can be utilized as means of enhancing domestic production, savings and exports through the equitable distribution among states so that they can attract FDI inflows at their own level. As per the study, the sectors that attracted higher inflows were Communication services as per the CAGR and as per the share it is manufacture sector. The Luxernbourg was at highest FDI inflows as per the CAGR and as per the share it is from Mauritius.