Foreign Investment in India

The legal, economic and financial reforms undertaken by the Indian government since the early 1990’s have resulted in substantial and rapid growth of the Indian economy and led to the integration of India into the global economy. While reform efforts stalled somewhat during the weak coalition governments of the mid-1990’s, following the 1999 parliamentary elections, the Bharatiya Janata Party-led government launched a second round of economic reforms, which included major privatization, deregulation and tariff reduction initiatives. Annual foreign direct investment in India rose from approximately $100 million in 1990 to an estimated $5.5 billion in 2003¹, and while some barriers continue to restrict foreign investment in India, momentum toward liberalization of the Indian economy seems to be irreversible.