Journal of Commerce and Accounting Research

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Sectoral Analysis of Foreign Direct Investment in India During First Generation Reform Period


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1 Commerce Department, PGDAV College, University of Delhi, Delhi, India
     

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Since 1991, India has cautiously and slowly opened almost all the sectors, except a few related to strategic importance, for foreign investors. Degree of openness of various industrial sectors for FDI has been increased to the extent of 100 percent by consistently liberalising industrial policies of the sectors. The purpose of the paper is to study pattern and trends of sectoral distribution of FDI within the background of the first generation reforms and liberalised industrial policies during 1991-2001.

The paper has used series of the dynamics and stylistic indices and statistical tools such as three level indices, index of rank dominance, and correlation matrices for explaining the pattern of FDI distribution across sectors during 1991-2001. The results show that electrical, transportation, chemical, telecommunication, and service sectors are most dominating sectors and represent almost 75 percent of total FDI received during 1991-2001. Index of rank dominance indicates distribution of FDI across the sectors is top heavy.


Keywords

Foreign Direct Investment, Industrial Policy, Industrial Sectors, Ranks Dominance, Correlation.
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  • Sectoral Analysis of Foreign Direct Investment in India During First Generation Reform Period

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Authors

Manoj Kumar Sinha
Commerce Department, PGDAV College, University of Delhi, Delhi, India

Abstract


Since 1991, India has cautiously and slowly opened almost all the sectors, except a few related to strategic importance, for foreign investors. Degree of openness of various industrial sectors for FDI has been increased to the extent of 100 percent by consistently liberalising industrial policies of the sectors. The purpose of the paper is to study pattern and trends of sectoral distribution of FDI within the background of the first generation reforms and liberalised industrial policies during 1991-2001.

The paper has used series of the dynamics and stylistic indices and statistical tools such as three level indices, index of rank dominance, and correlation matrices for explaining the pattern of FDI distribution across sectors during 1991-2001. The results show that electrical, transportation, chemical, telecommunication, and service sectors are most dominating sectors and represent almost 75 percent of total FDI received during 1991-2001. Index of rank dominance indicates distribution of FDI across the sectors is top heavy.


Keywords


Foreign Direct Investment, Industrial Policy, Industrial Sectors, Ranks Dominance, Correlation.

References