The Impact of Export and FDI on the Economic Growth Rate in India: An ARDL Bound Testing Approach

Abstract

The development of exports is a crucial factor in driving the growth of the Indian economy. India has often experienced turbulence in its economic growth and development throughout its history. The study has demonstrated the disruptions that have taken place in the nation's development and export patterns by analysing data from 1970. Flow stability has only been found in FDI for the whole coverage period. Hence, attaining export stability and expansion are the two most crucial criteria for the Indian economy. The article demonstrates the existence of a long-term relationship between exports, foreign direct investment (FDI), and GDP growth. Hence, the development of export and foreign direct investment (FDI) policies is crucial for a nation to attain economic stability. Furthermore, as the study investigates, there is a necessity to enhance the exportation in diverse industries for a comprehensive analysis. Enhancing foreign direct investment (FDI) inflows into the economy can further bolster export promotion. The administration may prioritize the relaxation of limitations on foreign direct investment (FDI) in industries that have not received much attention previously. With the rise in foreign direct investment (FDI) inflows, these industries have the potential to enhance their production and export strategies, therefore making a significant contribution to India's long-term economic growth. It is feasible to do thorough study on the particular industries that should be given priority in order to improve export promotion and attract foreign direct investment (FDI) in the Indian economy.