Does FDI inflow have impact on agricultural and industrial sector in India?

Abstract

The FDI inflows technological spill over benefits widens the scope of international competition and strengthens the supply side capabilities of a host country for producing and selling goods and services, which lead to higher economic growth. The Foreign Direct Investment helps to build up agricultural sector and industrial sector in India which improves their performance by creating necessary suitable infrastructures and by multiplier effect leads to increase in employment, income and savings thereby strengthen the infrastructure of the country and make it more competitive globally. The main objective of this paper to analyse the determinants of FDI inflows at the micro level i.e., at the firm or sectoral level (Agricultural and Industrial sector). The data were taken from the Hand book of statistics on Indian economy, published by the RBI in 1993-94 and 2023-24 for spanning of 30 years. The findings reveals that sectors like Agricultural sector (12.65) and industrial sector (15.11) reveals that WPI (price level) is the positive determinant to FDI inflows into the India. however, the inflation rate equal to -3.170 which means if one percent in inflation rate would decrease of 3.170 per cent of FDI inflows in to agricultural sector and 4.980 per cent to industrial sector. The agricultural and industrial sector is an asset for any developing and high-density country because it causes economic growth provides income and food security and helps to reduce poverty. The policymakers taking business-friendly policies, make sure that FDI inflow into agriculture and industrial sector.