This research paper investigates the relationship between Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) across various Indian states, examining the extent to which FDI inflows influence economic growth. Using data from 2015-16 to 2018-19, we calculate the coefficient of determination (r²) to understand the impact of FDI on GDP. The findings reveal significant positive correlations in states such as Bihar, Jharkhand, and Odisha, indicating that FDI plays a crucial role in their economic growth. Conversely, regions like Maharashtra and Goa show minimal FDI impact, highlighting the need for diversified economic strategies. The study emphasizes the importance of tailored policies to enhance the investment climate, infrastructure, and sustainable development, fulfilling the paper's objective to provide insights for balanced economic growth across India.