The Foreign Direct Investment (FDI) phenomenon is a manifestation of international capital flows and economic interactions constitutes the financial dictum of this era. With the incredible explosion in transportation, information and communication technology together with incessant liberalization of trade and investments, the nations across the world have undeniably become more and more integrated. The centre of gravity of internationalization of endeavour has gradually shifted its base from commodity trading to swapping over of things of production. Sourcing, manufacturing and assembling from some foreign land in the variety of FDI became quite easy and customary nowadays. Furthermore, a paradigm shift has been observed since the appearance and widespread popularity of digital technology. During this era of knowledge, a transformation is being noticed in the roles of developed, transition, emerging and developing economies facing a digital divide. The digital economy is basically modifying the methods during which the companies manufacture and market products and services across the nations. The multi-national corporations (MNCs) with a digital presence can now directly have communication with all the customers and can sale to even outside India without any need of heavy investment outside India. Their economic effect on other economies has consequently become more ethereal and fewer discernible in productive capacity augmentation and employment generation. The host countries generally perceive FDI to be the simplest way of filling up the void between the prevailing supplies of savings, exchange, government income, technological knowhow and human capital skills in an economy, and also the desired level of those resources essential to realize growth and development targets. On the opposite hand, foreign companies treats FDI as vital instrument to identify manufacturing and marketing activities throughout national precincts in accordance with their corporate stratagems, to avail themselves of the competitive advantages of the host economies.

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Keywords: FDI, MNCs, Digital Technology, Developing Economies, Liberalization.