Journal of Education & Social Policy

ISSN 2375-0782 (Print) 2375-0790 (Online) DOI: 10.30845/jesp

FDI Inflows in India and China since 2003: A Comparative Analysis
Javaid Ahmad Dar, Maninder Singh

The importance of foreign direct investment for the overall economic development, especially for the developing world, has increased significantly in the last two decades. All the countries, including India and China, are making efforts to attract greater inflows of FDI. This paper seeks to analyze the impact of FDI inflows on economic growth of India and China and to highlight the determinants of FDI in these two countries. This study is exploratory in nature and the secondary data collected from World Bank Report and United Nations Conference on Trade and Development (UNCTAD) has been studied by using Multiple Regression and Correlation coefficients. The results of the study reveal that FDI is a significant factor influencing the level of economic growth in India and China, but China’s FDI inflow is highly positively correlated with GDP growth than India. The output also shows us1 that major determinants of FDI inflows are Inflation, foreign exchange reserves, financial position, total trade and exchange rate but these major determinants are more influential in china than in India. China is performing far better than India in terms of FDI attraction.

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