Since India is a developing Country, and it is encountering the problem of poverty and unemployment since independence. With the second largest Population in India, probably the employment resources generated over the period of 7 decades since independence are not enough to cater the problem of unemployment. Employment generation is always found as an important measure for enhancing the growth of any developing economy like India. Foreign Direct Investment may provide solution to number of issues of the economy one of them is unemployment especially in India. With intention to have a growth trend, the government of India has approved fifty one percent Foreign Direct Investment in Multi brand and hundred percent in Single Brand retail Sector. The Objective with which this Research Paper is written is to find out the impact of Foreign Direct Investment on Growth of Economy and employment. The period set out for the research is taken as around last two decades. With the help of various secondary data obtained from various published resources, and using descriptive Technique of analysis, the impact of Foreign Direct Investment on Growth of Economy and employment generation has been evaluated. Study shows that Foreign Direct Investment has shown around 3 times increase in growth compare to second decade with first decade. With the introduction of Foreign Direct Investment in India, the primary sectors which attracted the Foreign direct Investment was Banking and Insurance followed by Telecommunication and Automobile. However the contribution in employment generation of Foreign Direct investment is found higher in service sector than any other sector. However the role of Foreign Direct Investment alone cannot be taken as the only factor in this growth. India’s own captive employment generation is also played a significant role.

Keywords: Investments, Foreign Direct Investment, Employment, Banking, Insurance.