The Influence of Foreign Direct Investment on Manufacturing Job Growth in India

Abstract

In the globalized world, foreign direct investment (FDI) has emerged as an important panacea for not only addressing the issue of fund constraints but also for income & employment generation in developing countries like ours. This article attempts to analyse the impact of FDI inflow on employment generation in the manufacturing sector of the Indian economy during the period 1991 to 2021 by using secondary data from different sources. While one of the major expectations of globalization is that it enhances the opportunities for employment in the labour surplus by fetching investment in the economy; the present study reveals the saga of an unsatisfactory growth of employment in the manufacturing sector despite increasing inflow of FDI funds. Regression results reveal that when coupled with appropriate public expenditure, the FDI has the potential to generate employment in the manufacturing sector if and if it enters into the labour-intensive sub-sectors.