Impact of Foreign Direct Investment on Manufacturing Industry in India

  • Velu Suresh Kumar Assistant Professor & Head, PG & Research Department of Economics, H.H. The Rajah’s College (Autonomous),Pudukkottai, Tamil Nadu, India
  • R Santhi Ph.D. Research Scholar, PG & Research Department of Economics, H.H. The Rajah’s College (Autonomous), Pudukkottai, Tamil Nadu, India
Keywords: FDI, GDP, Manufacturing Sector, Liberalization, Make in India and Smart Cities


The economic development of a country is based on its industries revolution with more production and promotion. Foreign investment is considered as an important factor especially for the manufacturing sector of the developing countries as foreign investors tend to bring with it the capital, technology and skills needed for industrial development. Until 1991, India did not have enough savings to meet the capital requirements. Moreover, the licensing agreements as well as capital goods imports also did not give it the requisite industrial technology. But with the inflow of foreign funds after 1991 certain gaps with regard to capital, technology for industrial development have been fulfilled. This paper seeks to present the trend and pattern FDI inflow and also its impact on manufacturing sector due to the liberalization of economic policy as well as the policy framed by the Honourable Prime Minister Mr. Narendra Damodar Das Modi’s dream Project of “Make in India” and Smart Cities” etc.

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