Evaluating the Trends and Impact of Foreign Direct Investment Inflows in Madhya Pradesh

Avinash Sahani

doi:10.36948/ijfmr.2026.v08i04.84531

Evaluating the Trends and Impact of Foreign Direct Investment Inflows in Madhya Pradesh

Author(s)	Mr. Avinash Sahani
Country	India
Abstract	Abstract: Foreign Direct Investment (FDI) plays a pivotal role in promoting economic development by facilitating capital accumulation, technological innovation, industrial expansion, and employment opportunities. This study investigates the trends and economic implications of FDI inflows in Madhya Pradesh over the period from FY2015–16 to FY2024–25. The analysis is based exclusively on secondary data collected from credible government sources, including the Department for Promotion of Industry and Internal Trade (DPIIT), Reserve Bank of India (RBI), Ministry of Statistics and Programme Implementation (MoSPI), the Madhya Pradesh Economic Survey, and the Periodic Labour Force Survey (PLFS). A descriptive and analytical research approach has been employed, utilizing trend analysis, correlation analysis, and simple linear regression to assess the relationship between FDI inflows, Gross State Domestic Product (GSDP), and employment. The findings indicate that FDI inflows into Madhya Pradesh fluctuated considerably during the study period, recording a substantial increase in FY2020–21 and FY2021–22, followed by a decline and a modest recovery in FY2024–25. The empirical results reveal a weak and statistically insignificant short-term relationship between FDI inflows and GSDP, whereas a negative association is observed between FDI and employment, primarily due to the effects of the COVID-19 pandemic and the capital-intensive nature of foreign investments. Despite these short-term challenges, FDI continues to contribute significantly to industrial development, infrastructure enhancement, and the state’s long-term investment prospects. The study recommends strengthening investment-friendly policies, improving infrastructure, streamlining regulatory frameworks, and encouraging sector-specific investment initiatives to foster sustainable economic growth in Madhya Pradesh.
Keywords	Foreign Direct Investment (FDI) Economic Growth GSDP Correlation Analysis Regression Analysis Industrial Development.
Field	Business Administration
Published In	Volume 8, Issue 4, July-August 2026
Published On	2026-07-26
DOI	https://doi.org/10.36948/ijfmr.2026.v08i04.84531

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Evaluating the Trends and Impact of Foreign Direct Investment Inflows in Madhya Pradesh

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