It was hoped that with the partial liberalisation of the capital account in the early 1990s, capital inflows would contribute towards India's economic growth. This paper reviews the role of capital flows into India and examines if such flows have in any way contributed to economic growth. The model developed by this paper suggests that capital inflows have not contributed towards either industrial production or economic growth. Either the amount of capital inflows has not been enough or the amounts flowing in have not been properly utilised. At the same time, studies also indicate that capital inflows have not had much impact on India's export growth or productivity.
