Tanushree Goyal

Abstract

Foreign Direct Investment (FDI) and foreign aid have played crucial roles in influencing the economic development of developing countries, particularly India. This paper explores the

impact of FDI and foreign aid on India's economic advancement, focusing on their contributions, associated challenges, and long-term effects. Utilizing empirical data and case studies,this research underscores the relationship between these external financial resources and India's

economic progress. The results indicate that FDI has notably enhanced sectors such as manufacturing, technology, and infrastructure, while foreign aid has served a supportive function in mitigating socio-economic inequalities. Nonetheless, the success of these financial inflows is contingent upon effective policy frameworks, governance, and institutional capabilities.