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VOL. 8, ISSUE 2 (2026)
Pattern of Country-origin of FDI to different sectors of the Indian Economy
Authors
Haridwar Yadav, Dilip Kumar Jha
Abstract
This paper examines the evolving structure of
foreign direct investment (FDI) in India through a country-origin and sectoral
perspective, highlighting how source-country capabilities, sectoral
specialisation, and host-country policy frameworks shape investment outcomes.
Using secondary data from the Department for Promotion of Industry and Internal
Trade (DPIIT), UNCTAD, and OECD, the study analyses patterns of FDI inflows
across major investing economies and key sectors over the post-liberalisation
period. The findings reveal a distinct country–sector alignment in India’s FDI
landscape. Developed economies such as the United States, Germany, Japan, and
the United Kingdom dominate technology-intensive manufacturing,
pharmaceuticals, automotive, capital goods, and IT-enabled services, reflecting
strong firm-specific ownership advantages. Financial hubs such as Singapore and
Mauritius act primarily as intermediary jurisdictions, channeling multinational
capital into infrastructure, energy, real estate, and financial services.
Emerging economies exhibit selective participation, while outward investment
from Myanmar remains negligible. Sectorally, FDI is concentrated in
manufacturing, IT services, financial services, energy, and infrastructure,
whereas agriculture, healthcare infrastructure, and primary sectors remain
under-represented. The results are consistent with the
ownership–location–internalisation (OLI) paradigm and reinforce the importance
of policy liberalisation, market size, and institutional quality in attracting
growth-enhancing FDI. The study concludes that sustaining high-quality
investment inflows requires a strategic shift towards technology-oriented,
innovation-driven, and diversified investment partnerships.
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Pages:81-99
How to cite this article:
Haridwar Yadav, Dilip Kumar Jha "Pattern of Country-origin of FDI to different sectors of the Indian Economy". International Journal of Commerce and Economics, Vol 8, Issue 2, 2026, Pages 81-99
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