Location of FDI in India: Some Less-Explored Aspects

While there has been extensive research to identify the factors which influence FDI's choice of host countries to invest in, considerable interest is also being attached to location of FDI establishments within specific countries. In India too, a few studies focused on the distribution of FDI in different states. Most of these were, however, based on aggregate FDI and that too of approvals only. Even those attempted at some level of disaggregation do not take note of specific characteristics of FDI like modes of entry, nature of the foreign investor, sector of investment, characteristics of local partner if any, etc. Since mid-2000s even this information is not available and it has become more difficult to identify FDI flows/establishments in different states. Based on India's experience since 1991, this note seeks to underline the need for disaggregated analysis which takes into account investor/sectoral characteristics, mode of entry, size of investment, etc.