Liberalisation, Foreign Direct Investment Flows and Development

Most developing countries now offer a welcoming attitude to FDI. After following a somewhat restrictive policy towards FDI, India has liberalised her policy regime considerably since 1991. This liberalisation has been accompanied by increasing inflows and also by changes in the sectoral composition, sources and entry modes of FDI. The increasing recognition of India's locational advantages in knowledge-based industries among MNEs has led to increasing investments in software development and global R&D centres set up in India to exploit these advantages. This paper reviews the Indian experience with FDI since 1991 in a comparative east Asian perspective