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INTERNATIONAL JOURNAL OF ADVANCED RESEARCH IN COMMERCE, MANAGEMENT & SOCIAL SCIENCE (IJARCMSS) [ Vol. 9 | No. 2 (IV) | April - June, 2026 ]

Foreign Direct Investment and Ease of Doing Business: Evidence from India’s Manufacturing Sector

Prof. Prakash Sharma & Namrata Kalwani

Foreign Direct Investment has emerged as an important source of capital formation, technology transfer and industrial development, particularly in developing economies such as India. A favourable business environment plays a significant role in influencing investment decisions, and the World Bank's Ease of Doing Business(EODB) framework has become an important measure for assessing the regulatory environment across economies. India has undertaken several business regulatory reforms over the last two decades, resulting in a considerable improvement in its Ease of Doing Business Score. During the same period, the manufacturing sector also witnessed a substantial increase in foreign direct investment inflows. The purpose of this paper is to examine the relationship between the Ease of Doing Business Score and Foreign Direct Investment in India's manufacturing sector during the period 2004–2020. The empirical results reveal a strong positive and statistically significant relationship between the Ease of Doing Business Score and manufacturing FDI in India. The study concludes that continued regulatory reforms, supported by effective industrial policies and institutional improvements, can further strengthen India's attractiveness as a preferred destination for manufacturing investment. The study employs descriptive statistics, correlation and simple linear regression using annual data from 2004-2020.

Sharma, P. & Kalwani, N. (2026). Foreign Direct Investment and Ease of Doing Business: Evidence from India’s Manufacturing Sector. International Journal of Advanced Research in Commerce, Management & Social Science, 09(02(IV)), 67–74. https://doi.org/10.62823/IJARCMSS/9.2(IV).9130
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DOI:

Article DOI: 10.62823/IJARCMSS/9.2(IV).9130

DOI URL: https://doi.org/10.62823/IJARCMSS/9.2(IV).9130


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