Foreign Direct Investment flow in India: Analysing the Influence of Make in India Campaign

This paper attempts to analyse the trend of FDI inflows to India before and after the implementation of the Make in India Campaign. The research paper investigates the impact of the “Make in India” campaign on Foreign Direct Investment (FDI) inflows, comparing periods before and after its launch in September 2014. The initiative aimed to transform India into a global manufacturing hub by encouraging domestic and international companies to produce goods in India. Using data from the World Development Indicators and Reserve Bank of India, the study analyses FDI trends and finds a significant increase in absolute FDI inflows post-campaign. This surge is attributed to the removal of FDI barriers, improved ease of doing business, and targeted efforts to attract foreign investments, with key sectors like automobiles, aviation, biotechnology, defence, media, thermal power, oil, gas, and manufacturing seeing substantial growth. However, the study also notes that while absolute FDI inflows have risen, FDI as a percentage of GDP has declined, indicating that FDI growth has not kept pace with the overall economic expansion. The paper explores reasons for this discrepancy, such as rapid GDP growth outstripping FDI growth and the need for further policy adjustments. The paper concludes with suggestions such as, continuous policy reforms and targeted strategies are essential to maximize FDI benefits and support India’s long-term economic growth.