[19] FOREIGN DIRECT INVESTMENT (FDI) INFLOWS IN INDIA: TRENDS, DETERMINANTS AND FUTURE PROSPECTS
How to Cite: Md Shamshad Alam & Azra Bano (2026).Foreign Direct Investment (FDI) Inflows in India: Trends, Determinants and Future Prospects. International Journal of Multidisciplinary Research & Reviews, 5(5), 220-232. https://doi.org/10.56815/ijmrr.v5i5.2026.220-232
Abstract
This study examines the trends, determinants, and future prospects of Foreign Direct Investment (FDI) inflows in India from 2000–01 to 2024–25. The analysis employs secondary data obtained from DPIIT, RBI, World Bank reports, and Economic Surveys. Statistical methodologies, including the Mann-Kendall trend test, Sen’s slope estimator, and trend models, were used to evaluate the long-term behaviour of FDI inflows. The findings reveal a significant upward trend in both gross FDI and FDI equity inflows, whereas Foreign Institutional Investment (FII) shows no significant trend. The services sector, computer software and hardware, telecommunications, automobiles, and construction infrastructure have emerged as the primary recipients of foreign investment. Maharashtra, Karnataka, Gujarat, and Delhi accounted for the highest share of FDI inflows, with Mauritius, Singapore, the USA, and the Netherlands as the leading source countries. The study identifies economic liberalization, market size, infrastructure development, skilled labour, and government initiatives, such as “Make in India” and the PLI Scheme, as key determinants of FDI growth. The study concludes that India possesses strong potential to sustain foreign investment inflows despite global economic uncertainties and rising international competition.
