Purpose: The aim of this study is to examine the impact of foreign direct investment (FDI) inflow and information and communication technology (ICT) on the economic performance of India by analysing annual data from 1991 to 2019. Design/methodology/approach: This study has used data collected from secondary sources. The variables considered for the analysis are based on the review of theoretical and empirical literature. Moreover, apart from the quantitative variables, two qualitative variables have also been considered through the use of dummy variables. The Cobb–Douglas, Transcendental logarithmic and Simultaneous equations models have been used for the study. Findings: The result reveals that the partial elasticities of the per-capita gross domestic product (PCGDP) of India with respect to FDI, mobile density (MD) and internet density (ID) are 0.074, 0.024 and 0.036, respectively. The positive and significant coefficient of the interaction among FDI, MD and ID in the estimation of the transcendental logarithmic function indicates the importance of ICT infrastructure in extracting the best out of FDI (the coefficient is 0.011 for the model without any control variables and it is 0.005 with control variables). Originality/value: The findings of this study are more reliable as the latest available data have been analysed through the appropriate econometric models. This study will be useful for the policymakers in the formulation of policies with regard to foreign capital and digitalisation.

Purpose: This paper aims to examine the convergence in per-capita income (measured as per-capita net state domestic product) of regions in India during the period 1990–1991 to 2017–2018. Two separate analyses have also been done for the sub-periods, i.e., 1990–1991 to 2003–2004 and 2004–2005 to 2017–2018, to find out the effect of the second phase of economic liberalization in India. Design/methodology/approach: In a panel data study, the estimation of absolute and conditional beta (β)-convergence and sigma (σ)-convergence across 17 Indian regions have been done. To measure the dispersion of per-capita income across the regions in India, the standard deviation of logs, Gini coefficient, Mehran measure, Piesch measure, Kakwani measure and Theil index have been estimated. In addition to this, these indices have been regressed over time. Findings: This study finds the presence of absolute and conditional β-convergence; the regions with low initial per-capita income have grown faster than the regions with high initial per-capita income. Further, this study finds that foreign direct investment (FDI) inflow and the availability of power enhance growth across regions. However, this study finds the presence of σ-divergence, which indicates that the economic inequality among the regions in India has widened over the periods, calling for policy interventions to promote growth in the backward regions through the promotion of FDI inflow and the availability of power. Originality/value: This study highlights the rising economic inequality among the regions in India by analyzing the latest available data through appropriate econometric techniques.

Foreign Direct Investment (FDI) has emerged as an important topic for researchers and policymakers in India. The present study analyze the dimensions, i.e., current status, global position, trends, growth, sources, sectoral composition, regional distribution, and the determinants of FDI inflow in India after the economic reforms in the year 1991. Furthermore, this piece of research answers an important question, i.e., whether the currency area hypothesis of Aliber (1970) is good enough to explain FDI inflow in India during 1991 – 2018? The study uses trend analysis and simple linear regression analysis to analyze the data. The findings of this research have shed light on some of the important aspects of FDI inflow in India. The inward FDI in India has increased from the US $75 million in 1991 to the US $42285.68 million in 2018, registering an annual average growth rate of 37.85 per cent. This study also finds that the increase in the value of Indian Rupee has an inverse impact on the FDI inflow. Thus, the findings support the currency area hypothesis of Aliber (1970). It suggests that policymakers should consider the exchange rate while formulating policy to attract FDI inflow into India.