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India's Collaborative Advantage: How Foreign Companies Drive India Economic Progress

India is expecting to hold a leading economic position in the near future, and experts also hope that India’s GDP will also grow noticeably. Foreign Direct Investment (FDI) is highly responsible for long-run financial growth in the country. It helps many domestic start-ups and other popular organisations to implement advanced technologies to enhance the productivity in the companies.

Foreign Companies Drive India Economic Progress

It is nice to notice that India is having huge investments from different countries. FDI is no doubt a great source of foreign currency that makes noticeable India’s economic growthThe total FDI has risen to USD 70.97 billion in 2022-2023 from USD 45.15 billion in the financial year 2014-2015. 

FDI and its Impact on the Indian Economy

Investments from Foreign collaboration always have a positive impact on the Indian economy. You can check below the advantages of foreign investment in the Indian Economy. 

Improved Economic Development

Foreign investment plays a primary role in enhancement of financial growth in the country. Inflow of foreign currencies helps to solve working capital crisis and hence organisations can grow better. This financial will help in production development and better infrastructure. Organisations will notice technical and skill development

Further technical innovation 

The regular inflow of foreign currencies is helpful in the advancement of technologies. Organisations will get enough support for technical advancement through expertise from investing countries. Experts from other countries also share their advanced technical knowledge with domestic companies. Domestic companies can focus more on technical innovation

Enhanced Export

The prime aim of foreign investors is to enhance the chances for export from India. Foreign companies use the local resources and skills to manufacture their products and offer more efficient service. This initiative helps making all the products competitive in the market and also boosts the possibility of export of India. 

More Job creation

Foreign investment in Indian companies enhances the chances for creation of employment. Investment in foreign currencies helps in the further development of the organisation, and this creates more job vacancies. Hence, companies will need more employees to continue the development of the organisation. This situation will automatically reduce the unemployment situation within the country. Ultimately, this situation will enhance the standard of living among the individuals. 

Infrastructure Improvement and Technology transfer

Another noticeable benefit of FDI is to develop the infrastructure of any domestic company. This investment also helps in the transfer of advanced technology to domestic organisations. Foreign investment makes massive development in the following areas-

  • Energy supply
  • transportation of networks
  • development of the communication industry

Divergence of Manufacturing Base

The inflow of foreign currency clearly shows a divergence in the industrial base. Foreign investors are always interested in investing their money in different sectors. This situation makes India less dependent on a single industry, and it seems reasonable that India is growing in other sectors. 

Improvement in employment skills

In recent times, many Indian companies are receiving foreign investments from many reputed international companies. This investment helps in development of skills in local workforce in Specific sectors (e.g., IT, pharmaceuticals, automotive). Individuals who are working in foreign owned companies often get opportunity in skill development and learning advanced technologies. 

Top foreign companies making Foreign Direct Investment (FDI) in India

Company Name


Specialised in 

Investment made




$8 Billion for operational purpose


Slovakian company

Joint ventures with Zurari Industries 

50:50 share for establishment for Ethanol plant



Medical technology

$350 million for advancement of medical technology.




Automotive and clean energy

$3 Billion in the manufacturing sector



Cloud computing and virtualisation

US$2 Billion in cloud software

Government Initiatives

No doubt, the more FDI in India, the country will grow more. As per experts, different industrial sectors will enjoy immense Infrastructure development due to rise in the inflow of foreign currencies.


On 16th April, 2024, the Government of India has liberalised the regulations for foreign investors and has widened the route of FDI especially in the space sector. This policy will attract more foreign investors to invest in manufacturing machinery for space research, satellites, etc. As per this notification, foreign investors can invest upto 74% for manufacturing and operation of satellite.


The Government targets to achieve $100 billion FDI in future. However, till 2023, total inflow of foreign currency in India was $17.96 Billion and total outflow was $11.54 Billion. This results many start-ups to grow in the recent time. 

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