An Economic Analysis of Globalization and Foreign Direct Investment Inflows in India

S Karthikeyan; S Senthil kumar

S Karthikeyan Assistant Professor, Department of Economics and Centre for Research in Economics, The, Madura College (Autonomous), Madurai
S Senthil kumar Ph.D. (Full time) Research Scholar, Department of Economics and Centre for Research in Economics, The, Madura College (Autonomous), Madurai

Keywords: FDI – Foreign Direct Investment, RBI – Reserve Bank of India, GEI – Globalisation Equity Inflow, EII - Equity Inflow of India

Abstract

Foreign direct investment (FDI) is direct investment into production or business in a country by a company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is done for many reasons including to take advantage of cheaper wages or for special investment privileges such as tax exemptions offered by the country as an incentive to gain tariff-free access to the markets of the country or the region. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. FDI refers to the net inflows of investment (inflow minus outflow) to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. This paper aims to analyse globalization and Foreign Direct Investment inflows in India.