India of today can be acknowledged as one of the fastest growing economy in the world. Considering the importance of FDI, the government of India has recently increased the minimum permissible limit in different sectors. The author captures the FDI inflows into India from various source countries.

India is the second largest country in the world, with a population of over 1.2 billion people. As a developing country, India's economy is characterized by wage rates that are significantly lower than those in most developed countries. These two traits combine to make India a natural destination for foreign direct investment (FDI). Until recently, however, India has attracted only a small share of global FDI, primarily due to government restrictions on foreign involvement in the economy. But beginning in 1991 and accelerating rapidly since 2000, India has liberalized its investment regulations and actively encouraged new foreign investment, a sharp reversal from decades of discouraging economic integration with the global economy.

In recognition of the important role of FDI in the accelerated economic growth of the country, the Government of India initiated a slew of economic and financial reforms in 1991. India is now ushering in the second generation reforms aimed at further and faster integration of its economy with the global economy. As a result of the various policy initiatives, India has been rapidly changing from a restrictive regime to a liberal one, and FDI is encouraged in almost all the economic activities under the automatic route.

The strong macroeconomic fundamentals, growing size of the economy and improving investment climate have attracted global corporations to invest in India. A major outcome of the economic reforms process aimed at opening up the economy and embracing globalization has led to tremendous increase in FDI inflows into India. According to AT Kearney, the global consulting firm, India ranks second in the world in terms of attractiveness for FDI. AT Kearney's 2007 Global Services Location Index ranks India as the most preferred destination in terms of financial attractiveness, people and skill availability and business environment. Similarly, UNCTAD's World Investment Report, 2005 considers India the second most attractive investment destination among the Transnational Corporations (TNCs).

Portfolio Organizer Magazine, Foreign Direct Investment, FDI, Indian Economy, Global Economy, Transnational Corporations, TNCs, Business Environment, Economic Reforms, Non-Banking Financial Companies, NBFC, E-commerce, Business-to-Business, B2B.