Competitive Pattern of Foreign Direct Investment in India

Abstract

Globalization can be summarized as opening-up of markets, leading to transfer of capital, technology and people. However, another important dimension of globalization is multilateralism. The international economic reforms encourage multilateralism leads allocative efficiency. Multilateralism implies importing capital from a variety of sources as may be most efficient. Indias FDI policy is in alignment with global FDI. In 1991, India had receiving FDI from 86 investing countries, which reached to 137 investing countries in 2013. This indicates global attractiveness and preferred investment destination. The paper examines FDI investing pattern of source countries in India. The period of study is 1991-2013. The paper applies a set of new indices like Index of Rank Dominance (IRD) and Bodenhorns measure of Mobility and Turnover. The most dominant country is USA. The RIRD (Relative Index of Rank Dominance) are top heavy. The first five countries are investing more than 60 percent FDI in India. Asian Tiger countries invested around 11 percent and BRICS countries have insignificant FDI in India. The competitive pattern of FDI has been declined among three different grouping countries. The global FDI in India has been declined 8 percent per annum in spite of favoured investment destination.

Keywords: Globalisation, Foreign Direct Investment, Dominance, Competition, Mobility and Turnover

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