Foreign Direct Investment and Economic Growth in India: An Empirical Study

Abstract

Foreign Direct Investment (FDI) has emerged as an important source of capital and development for emerging economies such as India. This study examines the impact of FDI on India’s economic growth during the period 2015–2024 using a quantitative and empirical approach. Time-series data are analysed to assess trends in FDI inflows and their relationship with GDP growth, along with selected macroeconomic variables. Econometric techniques including descriptive analysis, correlation, and stationarity tests are employed to ensure robustness of results. The findings indicate a steady rise in FDI inflows over the study period, while GDP growth exhibits cyclical fluctuations influenced by external shocks. The results suggest that FDI contributes to economic growth primarily through long-term and indirect channels, emphasizing the role of supportive macroeconomic conditions and sector-specific policies. The study provides useful insights for policymakers and investors seeking to enhance the developmental benefits of foreign investment in India.