{"id":13565,"date":"2025-06-06T11:27:10","date_gmt":"2025-06-06T10:27:10","guid":{"rendered":"https:\/\/icertpublication.com\/?page_id=13565"},"modified":"2026-03-03T18:24:56","modified_gmt":"2026-03-03T12:54:56","slug":"impact-of-foreign-direct-investment-on-human-development-index-a-study-of-indian-economy","status":"publish","type":"page","link":"https:\/\/icert.org.in\/index.php\/edu-mania\/edumania-an-international-multidisciplinary-journal-vol-03-issue-02\/impact-of-foreign-direct-investment-on-human-development-index-a-study-of-indian-economy\/","title":{"rendered":"Impact of Foreign Direct Investment on Human Development Index: A Study of Indian Economy"},"content":{"rendered":"\t\t
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Edumania-An International Multidisciplinary Journal<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Vol-03, Issue-2 (Apr-Jun 2025)<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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An International scholarly\/ academic journal, peer-reviewed\/ refereed journal, ISSN : 2960-0006<\/h5>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Impact of Foreign Direct Investment on Human Development Index: A Study of Indian Economy\n<\/h4>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Bhutani, Umang<\/span>1<\/span><\/span>, Chhabra, Vaishali<\/span>2 <\/span><\/span>and Makkar, Suman<\/span>3<\/span><\/span><\/p>

1<\/span><\/span>Assistant professor in Dev Samaj College for women Sector 45B, Chandigarh<\/span><\/p>

2<\/span><\/span>Assistant Professor of Economics in GGDSD College Sector-32C, Chandigarh<\/span><\/p>

3<\/span><\/span>Professor of Economics in Punjab University Chandigarh<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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DOI: <\/span>https:\/\/doi.org\/10.59231\/edumania\/9133<\/span><\/a><\/p>

Page No.: 281\u2013297<\/span><\/p>

Subject: Economics \/ Human Development \/ International Trade<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Received: Feb 05, 2025\u00a0<\/span><\/p>

Accepted: March 15, 2025\u00a0<\/span><\/p>

Published: April 01, 2025<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Thematic Classification: Foreign Direct Investment (FDI), Human Development Index (HDI), Indian Economy.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Abstract\n<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Foreign Direct Investment (FDI) is widely recognized as a crucial catalyst for economic growth, while the Human Development Index (HDI) serves as a comprehensive measure of a nation’s social and economic progress. Despite numerous studies investigating the connection between FDI, HDI, globalization, and other factors, the precise nature of the relationship between FDI and HDI remains somewhat unclear. This research paper aims to bridge this gap by empirically examining the impact of FDI on India’s HDI score. Utilizing the time-series data from World Bank Indicators and the Handbook of Indian Economy spanning the period 1990-2022, the study employs the Autoregressive Distributed Lag (ARDL) model to analyze the long-run impact of FDI on HDI. Furthermore, Error Correction Model is employed to investigate the short-run relationships between these variables. The empirical findings indicated the existence of long-run and short-run relationship between FDI and HDI along with a positive response of both the variables to a shock (impulse) in the corresponding variable. These findings are expected to provide valuable insights to the extent to which FDI contributes to human development in India. By understanding the nature and strength of this relationship, policymakers can formulate more effective strategies to attract and leverage FDI for enhancing human development outcomes, including improving education, healthcare, and overall quality of life for Indian citizens.<\/span><\/p>

Keywords:<\/span> Foreign Direct Investment, Human Development Index, ARDL, India.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Impact Statement\n<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Foreign Direct Investment (FDI) plays a critical role in shaping the trajectory of a nation’s economic and social development. In the context of the Indian economy, FDI has not only contributed to capital formation and industrial growth but also significantly influenced components of the Human Development Index (HDI) such as education, health, and standard of living. Through technology transfer, employment generation, and improved access to services, FDI has the potential to uplift marginalized communities and reduce regional disparities. However, the impact is not uniformly distributed and often depends on the sectoral allocation and regional absorption capacity of investment. This study highlights the complex interplay between FDI inflows and human development outcomes in India, emphasizing the need for strategic policy frameworks that ensure FDI contributes meaningfully and equitably to national human development goals. An informed understanding of this relationship can guide policymakers to align foreign investment with inclusive and sustainable development priorities.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Cite this Article\n<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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APA:<\/span> Bhutani, U., Chhabra, V., & Makkar, S. (2025). Impact of foreign direct investment on human development index: A study of Indian economy. <\/span>Edumania-An International Multidisciplinary Journal<\/span>, <\/span>3<\/span>(2), 281\u2013297. <\/span>https:\/\/doi.org\/10.59231\/edumania\/9133<\/span><\/a><\/p>

MLA:<\/span> Bhutani, Umang, et al. “Impact of Foreign Direct Investment on Human Development Index: A Study of Indian Economy.” <\/span>Edumania-An International Multidisciplinary Journal<\/span>, vol. 3, no. 2, 2025, pp. 281-297.<\/span><\/p>

Chicago:<\/span> Bhutani, Umang, Vaishali Chhabra, and Suman Makkar. “Impact of Foreign Direct Investment on Human Development Index: A Study of Indian Economy.” <\/span>Edumania-An International Multidisciplinary Journal<\/span> 3, no. 2 (2025): 281\u2013297.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Statements & Declarations\n<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Peer-Review Method:<\/span> This article was reviewed through a double-blind peer-review process by independent experts in macroeconomics and international trade. The reviewers scrutinized the econometric models and the correlation analysis between FDI inflows and HDI metrics to ensure high statistical reliability and scholarly depth.<\/span><\/p>

Competing Interest:<\/span> The authors, Umang Bhutani, Vaishali Chhabra, and Suman Makkar, declare that no financial or personal relationships exist that could influence the impartiality of the economic analysis or the findings of this study.<\/span><\/p>

Data Availability:<\/span> This research utilizes secondary data sourced from official reports by the Reserve Bank of India (RBI), the Ministry of Commerce and Industry, the World Bank, and the United Nations Development Programme (UNDP). All data points used for the econometric analysis are publicly available.<\/span><\/p>

Funding:<\/span> This study was supported by the institutional resources of Punjab University, Chandigarh, GGDSD College, and Dev Samaj College for Women. No external financial grants were received for this research.<\/span><\/p>

License:<\/span> \u00a9 2025 by Bhutani, U., Chhabra, V., & Makkar, S. This work is licensed under the Creative Commons Attribution 4.0 International License<\/span> (CC BY 4.0)<\/span>.<\/span><\/p>

Ethical Approval:<\/span> As the study relies exclusively on publicly available secondary data, it was exempt from institutional review board (IRB) approval. However, the authors have adhered to all standard academic integrity and ethical reporting guidelines throughout the research process.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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    Edumania-An International Multidisciplinary Journal Vol-03, Issue-2 (Apr-Jun 2025) An International scholarly\/ academic journal, peer-reviewed\/ refereed journal, ISSN : 2960-0006 Impact of Foreign Direct Investment on Human Development Index: A Study of Indian Economy Bhutani, Umang1, Chhabra, Vaishali2 and Makkar, Suman3 1Assistant professor in Dev Samaj College for women Sector 45B, Chandigarh 2Assistant Professor of Economics […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":11893,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"postBodyCss":"","postBodyMargin":[],"postBodyPadding":[],"postBodyBackground":{"backgroundType":"classic","gradient":""},"site-sidebar-layout":"no-sidebar","site-content-layout":"page-builder","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"disabled","ast-breadcrumbs-content":"","ast-featured-img":"disabled","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"class_list":["post-13565","page","type-page","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/pages\/13565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/comments?post=13565"}],"version-history":[{"count":6,"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/pages\/13565\/revisions"}],"predecessor-version":[{"id":29036,"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/pages\/13565\/revisions\/29036"}],"up":[{"embeddable":true,"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/pages\/11893"}],"wp:attachment":[{"href":"https:\/\/icert.org.in\/index.php\/wp-json\/wp\/v2\/media?parent=13565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}