Recently, Indian economy has experienced strong Foreign investment flows through Foreign Direct Investment(FDI) and Foreign Portfolio Investment (FPI). It's long term trend highlighted economy has received $748.78 billion through FDI since 2014-2025 whereas FPI has been boosted by equity market gains with total FPI asset under custody hitting $858 billion. A healthy and vibrant industrial sectors of capital markets is important for development of a nation. In the present scenario, sectors of Foreign investment in Indian economy for instance Automotive, Pharmaceuticals, Information Technology (IT), Textiles, Construction, power, equity segment and assets under custody (AUC) have attracted attention of investors to invest in these Industries particularly. This paper attempted to analyse some of sectors and their impact on Industrial Development in India by foreign investors. The present study is based on quantitative data and used secondary data  of annual time series. Data has been collected from the report of Reserve Bank of India, Department for Promotion of Industry and Internal Trade (DPIIT),world Bank report etc. To study the impact methods are practised such as comparative sectorial analysis, Autoregressive Distributed Lag (ARDL) and Garch model has been used to estimate volatility spillovers of FPI to sectoral output. The results indicated strong and positive long-run relationship with capital intensive, technology-based sectors hence leading to stable output growth and value addition. On the contrary, the FPI inflows showed a strong but volatile connection between FPI inflows and construction and  power industries, which is highly vulnerable to market sentiment. However, it was observed from study that the investment activities in industrial sectors of FDI and FPI have had significant impact on Indian economy.