Vol. 1, Issue 13, Part I (2015)

Abstract
FDI and FII both are associated with improved economic growth due to the influx of capital and increased tax revenues for the host country. The host countries often try to channel FDI investment into new infrastructure and other projects to boost development. Furthermore, foreign investment can result in the transfer of soft skills through training and job creation, the availability of more advanced technology for the domestic market and access to research and development resources. The local population may benefit from the employment opportunities created by new businesses. In India there is nexus between FDI and economic growth. The present paper attempts to study the significance of FDI and FII for the economic growth of India during 2001-2015. In order to achieve the objective of the paper, data have been collected from various secondary sources and the tools of correlation and regression have been applied. The study concludes that FDI affects the economic growth of India significantly whereas the role of FII for the economic growth of India is statistically insignificant. Mauritius has emerged as the most dominant source of FDI contributing 89.64 US$ billion and accounts for 34.74% of the total FDI inflows in India and the FDI inflows in services is the highest with 43.35 US$ billions i.e.16.80% and during the period of study.