RESEARCH REPORT

ON

Trade Openness and Foreign Direct

Investment
UNDER THE GUIDANCE OF
Mrs. Anindita Bhattacharya
( Research Guide )
SUBMITTED IN PARTIAL FULFILMENT FOR THE AWARD OF
DEGREE OF
MASTER OF BUSINESS ADMINISTRATION

By

Manish Kumar Gupta

MBA II YEAR (Finance & Marketing)
( Roll No.- 0909470049 )

GIMT INSTITUTE OF MANAGEMENT & TECHNOLOGY

LUCKNOW
(Affiliated to Mahamaya Technical University,
Lucknow )
 DECLARATION

This project has been undertaken as a partial fulfillment of the requirements for the

award of the degree of Masters in Business Administration by Mahamaya Technical

University, Lucknow.

I hereby, declare that this project is my original work and my findings are for

academic purpose only. These suggestions given are solely of my interpretation and

not to harm organizational interests. This project has not been presented in any

seminar or submitted elsewhere for the award of any degree or diploma.

( MANISH KUMAR GUPTA )

 ACKNOWLEDGEMENT

Every work constitutes great deal of assistance and guidance from the people concerned
and this particular project is of no exception. A project of this nature is surely a
result of tremendous support, guidance, encouragement and help.

I would like to express my sense of gratitude to Mr. Tarique Siddhiqi , the HOD of the
GIMT Institute of Management & Technology Greater Noida which is affiliated to
Mahamaya Technical University and Mrs. Anindita Bhattacharya, the faculty
member and my research guide for helping me complete this research.

At last but not the least I would like to thank my family members and my friends for their
help in completing this project.

Arun Pratap Singh

 PREFACE

This research report embodies the result of the research conducted in the partial
fulfillment of M.B.A., affiliated to Mahamaya Technical University. It was a great
opportunity to me to work with such a good subject.

India was a latecomer to economic reforms, embarking on the process in earnest only
in 1991, in the wake of an exceptionally severe balance of payments crisis. The need for a
policy shift had become evident much earlier, as many countries in East Asia achieved
high growth and poverty reduction through policies which emphasized greater export
orientation and encouragement of the private sector.

India took some steps in this direction in the 1980s, but it was not until 1991 that the
government signaled a systemic shift to a more open economy with greater reliance upon
market forces, a larger role for the private sector including foreign investment, and a
restructuring of the role of government.

The research report investigates the role of trade openness on Foreign Direct investment
(FD1) inflows in the economy during the period 1980-2009. It finds that trade openness
has a significant positive impact on FDI inflows.

However, its impact is much stronger in the post-globalization era (i.e., from 1991 to
2009) compared to the pre-globalization era (i.e., from 1980 to 1990). Other factors that
significantly affected India’s FDI inflows during this period are real effective exchange
rate and terms of trade. The study, therefore, suggests that the government has to
continue the openness policy with greater attention in order to attract more FDI inflows in
to the Indian economy.
 TABLE OF CONTENTS

 Chapter 1 : Introduction 1-20

21-30
 Chapter 2 : Literature Review

 Chapter 3 : Research Methodology 31-34

Research Objective

Research Design

Sampling Plan

Sampling Techniques

Sampling Units

Research Instruments

 Chapter 4 : Data Analysis and Findings 35-42

 Chapter 5 : Recommendations and Suggestions

43

 Chapter 6 : Conclusion 46

 Limitation of Research 47

 Bibliography 48

 Annexure 49-76