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The role of investment in promoting economic growth has received considerable attention in India since independence. India opened up to investments from abroad gradually over the past two decades, especially since the landmark economic liberalization of 1991. Apart from helping in creating additional economic activity and generating employment, foreign investment also facilitates flow of technology into the country and helps the industry to become more competitive. FDI and FII are equally connected to investment in a foreign country. FDI or Foreign Direct Investment is an investment that a parent company builds in a foreign nation. On the different, FII or Foreign Institutional Investor is an investment prepared by an investor in the markets of a foreign country. The objective of this research paper is to study the impact of FDI and investment by FII on economic growth of India and also give the recommendations for improving FDI inflows and investment by FII in India.
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