Abstract

Foreign Direct Investment (FDI) holds pivotal significance in India's trajectory towards global economic prominence. This study delves into the effects of FDI on the Indian economy, analysing changing trends and the regulatory framework governing FDI. The historical evolution of FDI regulations in India is traced, emphasizing significant policy shifts and their rationale. Industries like manufacturing, services, retail, and technology, have emerged as primary recipients of FDI, driving technological advancement, job creation, and economic growth. Recognizing the global nature of investment, India has implemented regulatory reforms to attract foreign investments. These reforms, including industry-specific relaxations, procedural simplifications, and liberalization measures, are scrutinized for their impact on both foreign and domestic investors. The study evaluates the complex effects of FDI on various stakeholders in the Indian market. It assesses impacts on domestic sectors, small-scale businesses, and analyses competition dynamics, technology transfer, and innovation ecosystems. Anticipating future trends, the study considers global geopolitical shifts, technological advancements, and evolving trade dynamics in India's FDI landscape. Potential areas for further regulatory enhancement are discussed to maintain India's competitiveness in the global investment arena. In conclusion, this research study offers a thorough examination of FDI's effects on the Indian economy. Policymakers, investors, and scholars can benefit from its comprehensive analysis of historical context, current regulations, and future trends in India's dynamic FDI environment. The study underscores FDI's crucial role in India's continued economic growth and global significance.

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