in Asia, have been witnessing a immense surge of FDI inflows during the past two

decades. Even though India has been a latecomer to the FDI scene compared to other

East Asian countries, its considerable market potential and a liberalized policy

regime has sustained its attraction as a favorable destination for foreign investors.

This research paper aims to examine the impact of FDI on the Indian economy,

particularly after two decades of economic reforms, and analyzes the challenges to

position itself favorably in the global competition for FDI. The paper provides the

major policy implications from this analysis, besides drawing attention on the

complexities in interpreting FDI data in India.

Key Words: - DIPP, Economic Growth, FDI, FIPB, IMF