Examining The Effect Of FDI On Economic Growth Of Developing Nations: A Comprehensive Analysis Of Indian Food Processing Industry Through ARDL Method

Abstract

Role of foreign direct investment in promotion of economic and overall development can’t be questioned. The level of FDI serves as a key indicator of a country's growth potential. In India, the agriculture and food processing sector plays a pivotal role, employing over 50 percent of the nation's workforce. Through extensive literature review it has been identified that no previous research studies the impact of FDI in food processing sector on economic development of India. This study establishes a connection between Foreign Direct Investment in the food processing industry and the overall economic development of India. The analysis employs co-integration and ARDL methods on data spanning from 2011 to 2022, focusing on the correlation between FDI in the food processing sector and the contribution of the food processing industry to India's Gross Domestic Product (GDP). The results show a long-term association between FDI in the food processing industry and economic growth, with FDI inflow in food processing industry having a positive and significant impact on growth.