2019, Vol. 2, Issue 1

author(s)
Dr. Shashi Kapur Das

abstract
India is one of the developing countries which have introduced a liberalization policy and part of it has relaxed the FDI regulatory framework on selective basis with reference primarily to the industrial sector since 1991. The FDI plays an important role in Indian economy and it is a non-debt creating long- term private capital. It also provides a stimulus to competition, innovation, savings and capital formation and enhances job creation, industrial growth and economic development. The economists believe that the impact of the FDI is positive, since it brings to the developing countries a package of capital, foreign exchange, technology, managerial expertise, skills and other inputs which are critical for the development on Indian economy. The FDI will improve the international equality in allocating capital. Capital formation through Foreign Investment plays an important role in the development of industry.