AN ANALYSIS OF TREND, PATTERN AND STRENGTH OF FOREIGN DIRECT INVESTMENT (FDI) AND FOREIGN INSTITUTIONAL INVESTMENT (FII) TO INDIA.

Abstract

Foreign direct investment (FDI) is an investment made by a company or individual in one country into a business or asset located in another country. FDI can be made in a variety of ways, including a controlling interest in a foreign company, establishing a new business in a foreign country, merging, or acquiring with a foreign company, purchasing real estate or other tangible assets in a foreign country. FDI is important for both the investing and host countries. For the investing country, FDI can provide access to new markets, resources, and technologies. It can also help to diversify the investing country's economy and increase its exports. For the host country, FDI can provide access to capital, technology, and management expertise. FDI can help to boost economic growth in the host country by creating new jobs, increasing productivity, and expanding markets, competitiveness, and transferring new technical know-how to the host country. Thus, the FDI can be a valuable source of economic development for both investing and host countries. However, the researcher plans to explore the trends, patterns, and strengths of foreign direct investment and foreign institutional investment inflow to India over the periods. Besides, an attempt also has been made to composition of cumulative FDI Equity in India. For analysing the aforesaid phenomenon, various standard statistical tools have been used. It has been observed that there is inflow of net foreign investment with slight fluctuations over the period. On the other hand, the trends of inflow of net portfolio investment to India have been found with huge fluctuations over the period. This deviation in the inflow of net portfolio investment may be due to the gap between the inflow and outflow of portfolio investment. The government must address structural issues like inconsistent policies, proliferation of line ministries, and suboptimal modal share in freight movement to ensure timely completion of infrastructure projects like designated freight corridors and maintain a steady policy framework for long-term investment in e-commerce.