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Industrialization, Liberalization and Two Way Flows of Foreign Direct Investment: The Case of India

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  • Kumar, Nagesh

    (United Nations University, Institute for New Technologies)

Abstract

This paper analyses the evolution of India's FDI position during the post-independence period in comparison with government policy and levels of industrialization and development. Since independence, India has pursued a strategy of industrialization with active governmental intervention. Domestic enterprises accumulated considerable capability in the process of industrialization, which has influenced not only the pattern of inward FDI, but has also led to Indian investments abroad. Changes in government policy have also had an important bearing on India's FDI position. The Indian government's attitude towards foreign investments has evolved over the post-independence period in four distinct phases: gradual liberalization from the establishment of independence till the late 1960s; a more selective attitude from the late 1960s throughout the 1970s; a certain liberalization of policy in the 1980s; and further liberalization of the policy regime with respect to both inward and outward FDI as a part of the structural adjustment program since 1991. The analytical frameworks provided by Dunning and Ozawa that posit the pattern of a country's FDI, delineating both inward and outward changes with the structural transformation of the economy, are kept in the background of the discussion.

Suggested Citation

  • Kumar, Nagesh, 1995. "Industrialization, Liberalization and Two Way Flows of Foreign Direct Investment: The Case of India," UNU-INTECH Discussion Paper Series 1995-04, United Nations University - INTECH.
    • Handle: RePEc:unm:unuint:199504
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    1. repec:lan:wpaper:3654 is not listed on IDEAS
    2. Brent Davis, 2000. "India and the East Asia Miracle," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 7(1), pages 63-76.
    3. Kumar, Nagesh, 1995. "Changing Character of Foreign Direct Investment from Developing Countries: Case Studies from Asia," UNU-INTECH Discussion Paper Series 1995-16, United Nations University - INTECH.
    4. Arun Natarajan Hariharan & Arindam Biswas, 2021. "A temporal review of global recognition of India's knowledge‐based industry through an institutional viewpoint," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 759-776, June.
    5. Sahu, Santosh Kumar & Narayanan, K., 2013. "Exports and Participation in Clean Development Mechanism [CDM] in Technology Intensive Industries in India," MPRA Paper 50745, University Library of Munich, Germany.
    6. Sadhana Srivastava & Rahul Sen, 2004. "Competing for Global FDI: Opportunities and Challenges for the Indian Economy," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 5(2), pages 233-260, September.
    7. Ahmet Türel & Nihat Tas & Mustafa Genç & Burcu Özden, 2017. "Audit Firm Tenure and Audit Quality Implied by Discretionary Accruals and Modified Opinions: Evidence from Turkey," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(1), pages 187-196, February.
    8. repec:lan:wpaper:3763 is not listed on IDEAS
    9. V N Balasubramanyam & V Mahambare, 2003. "Foreign direct investment in India," Working Papers 539987, Lancaster University Management School, Economics Department.
    10. Nakul Parameswar & Sanjay Dhir & Sushil, 2020. "Interpretive Ranking of Choice of Interaction of Parent Firms Post-International Joint Venture Termination using TISM-IRP," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 21(1), pages 1-16, March.
    11. Vinnie Jauhari, 2007. "Analysing Export Intensity Of The Select Electronics Firms In India," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 11(03), pages 379-396.
    12. Dr. Shyam Kumar Ghai, 2015. "Change in Scenario of Foreign Investment in India (From 20th to 21st Century)," Journal of Commerce and Trade, Society for Advanced Management Studies, vol. 10(1), pages 102-113, April.
    13. Rashmi Banga, 2003. "The differential impact of Japanese and U.S. foreign direct investments on exports of Indian manufacturing," Indian Council for Research on International Economic Relations, New Delhi Working Papers 106, Indian Council for Research on International Economic Relations, New Delhi, India.
    14. Singh, Lakhwinder & Jain, Varinder, 2009. "Emerging Pattern of India's Outward Foreign Direct Investment Under the Influence of State Policy: A Macro View," MPRA Paper 13458, University Library of Munich, Germany.
    15. repec:lan:wpaper:4048 is not listed on IDEAS
    16. David Mayer Foulkes., 2007. "Subdesarrollo y globalización," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 155-192, May.
    17. Kumar, Nagesh, 1996. "Foreign Direct Investments and Technology Transfers in Development: A Perspective on Recent Literature," UNU-INTECH Discussion Paper Series 1996-06, United Nations University - INTECH.

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