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         F       oreign Direct investment is a major monetary  there is availability of abundant workforce, open market and
                                                              high profits are achieved. Under such circumstances FDI has
                 source for the development of any country and
                 India is not an exception. Since investment has
                                                              grown into a most sought tool for capital flow.
                 always been an issue for the developing economies
          like India, Foreign Direct Investment (FDI) is one of the  Apart from being a critical driver of economic growth,
          measures to source the investment for growing economy.  foreign direct investment (FDI) is a major source of non-debt
          Economic policies of different developing nations have been  financial resource for the economic development. Foreign
          gradually changing towards free & globalized economies;  companies invest in India to take advantage of relatively
          even many socialist countries, including China have changed  lower wages, special investment privileges such as tax
          policies towards free economy.                      exemptions, etc. For a country where foreign investments
                                                              are  being  made,  it  also  means  achieving  technical
          Many countries including India have been liberalizing their  advancement  and  generating  employment,  India  has
          policies for  investment from the countries which  are  experienced a paradigm shift in its economic policies after
          teeming  with  capital  resources;  on  the  other  hand,  the process of liberalization had taken place after balance
          developed countries are focusing on new markets where  of payment crisis in 1991.

                                                              Generally, there may be apprehension regarding outcome
                               About the author               of foreign investment, because many developing countries
                                                              of Latin and Central America have borne the brunt of FDI in
                        Sanjay M. Nafde                       seventies and eighties of the last century. It is an established
                        Chief Manager (Formerly)              fact that FDI in India has played an imperative role in the
                        State Bank of India &
                        Freelance Writer                      development of economy, specifically during the time of
                                                              crisis situation that occurred during global recession in 2008.

            36 | 2024 | MARCH                                                              | BANKING FINANCE
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