Liberalisation and globalisation has lead to the opening up of Indian economy to foreign capital. Foreign Direct Investment plays a significant role in the development of an economy. India, being an emerging economy, is the second most attractive destination of FDI among BRICS. Service Sector, which is the fastest growing sector, leads to the socio economic growth of a country. The share of
... [Show full abstract] services sector in India's GDP has been on the rising trend since 1990's and more so because of its employment generation. The Indian Government's policy changes in FDI have led to the increase in flow of foreign capital. The trends of FDI inflow in India during the recent years show that there is a slow and definite shift from the manufacturing sector to the services sector. Services sector has played a major and vital force in driving the growth of Indian economy for more than a decade. The analysis made also proves that there is a positive correlation between the FDI inflows into services sector and the share of GDP of services sector and there is a growth in employment of services sector as well which proves that there is a true transformation of the services sector in India which is influenced by the FDI inflows.
