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External Financing in India: Sources and Types of Foreign Direct Investment

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Managing the Macroeconomy

Abstract

Foreign direct investment (FDI) inflows into India have been steadily rising in importance since the early 2000s. Based on United Nations Conference on Trade and Development (UNCTAD) data, in absolute terms, net FDI inflows to India peaked at over US$ 45 billion (bn) in 2008–09 just before the global financial crisis (GFC), representing around 3 per cent of the share in world FDI flows (Figure 6.1). FDI’s growing significance to the Indian economy can also be observed in its gradual but sustained rise in its share of gross domestic product (GDP) as well as gross fixed capital formation (GFCF). FDI as a share of GDP and GFCF reached a high of 4 per cent and 11 per cent, respectively, in 2008, before the slowdown caused by the GFC (Figure 6.2).

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Author information

Authors and Affiliations

  1. George Mason University, USA

    Ramkishen S. Rajan (Professor, Visiting Professor)

  2. National University of Singapore, Singapore

    Ramkishen S. Rajan (Professor, Visiting Professor)

  3. The World Bank Group, USA

    Venkataramana Yanamandra (Consultant)

Authors
  1. Ramkishen S. Rajan
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  2. Venkataramana Yanamandra
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© 2015 Ramkishen S. Rajan and Venkataramana Yanamandra

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Rajan, R.S., Yanamandra, V. (2015). External Financing in India: Sources and Types of Foreign Direct Investment. In: Managing the Macroeconomy. Palgrave Macmillan, London. https://doi.org/10.1057/9781137534149_6

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