Interstate Distribution and Sectoral Composition of FDI Inflows in India
| Author | Thomas Paul Kattookaran,Febina K. |
| Published date | 01 November 2018 |
| Date | 01 November 2018 |
| DOI | http://doi.org/10.1177/0015732518797026 |
| Subject Matter | Commentary |
Interstate Distribution and
Sectoral Composition of
FDI Inflows in India
Febina K.1
Thomas Paul Kattookaran2
Abstract
Foreign direct investment (FDI) refers to obtaining the ownership in a foreign
business entity. It can also be attributed that FDI circulates capital across national
boundaries. It can be defined as an investor based in one country (home country),
acquires an asset in another country (host country), with the intention to manag e it.
It is this dimension of management that distinguishes FDI from portfolio invest-
ment in foreign stocks and other financial instruments. For a terribly populated
country like India, a good quantum of resource is needed to fund its various
developmental needs, which the country does not have. To strengthen its infra-
structure, expertise and knowledge base, FDI is inevitable. Realizing these facts,
the government is now moulding a robust business environment to smoothen the
flow of FDI. An interstate comparison of FDI in India makes it quite apparent that
there exists huge variations in the inflow of FDI to different states. While some
regions like Delhi, Bombay, etc. receive soaring flow of FDI, it is very stumpy in
regions like Patna, Guwahati, etc. An overview on the sectoral distribution of foreig n
investment discloses the wide disparity in the distribution of foreign capital
among various sectors. While some sectors like service, construction, etc. receive
elevated flow of foreign capital, others lie fully ignored by the foreign investors.
JEL Classification: F21, F23, F63, O10
Keywords
FDI, interstate variation, sectoral composition, technology transfers, economic
development
Foreign Trade Review
53(4) 271–282
©2018 Indian Institute of
Foreign Trade
SAGE Publications
sagepub.in/home.nav
DOI: 10.1177/0015732518797026
http://journals.sagepub.com/home/ftr
Commentary
1 Research Scholar, Research Department of Commerce, St. Thomas’ College (Autonomous), Thrissur,
Kerala, India.
2 Associate Professor and Head, Research Department of Commerce, St. Thomas’ College (Autonomous),
Thrissur, Kerala, India.
Corresponding author:
Febina K., Research Scholar, Research Department of Commerce, St. Thomas’ College (Autonomous),
Thrissur, Kerala 676528, India.
E-mail: febinakmf@gmail.com
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