In recent years, India’s economy has proven to be highly receptive to both domestic and foreign investment. India’s investments are expected to be the driving force behind the country’s rapid industrialization and self-sustained growth. Foreign direct investment and investments made by non-resident Indians have been the most widely debated kind of investments in India. One of the most hotly debated topics in India today is foreign direct investment (FDI). India’s liberalization policies, which have earned it a place among the top rising economies, are paying off handsomely for the country’s economy as a whole.The FDI partnership is made up of a parent company and a foreign subsidiary that work together to build a Transnational Corporation (TNC). The Indian economy is well-suited to small and medium-sized American businesses who may find it difficult to compete in overcrowded Western markets. Indian and American SMEs can work together as complementary and additional partners to cater to the enormous Indian market, thanks to the substantial technical and managerial talents available in India. India has established itself as a low-cost base, attracting global corporations to set up shop there.Only 33 Fortune 500 corporations have a presence in India, compared to more than 100 in China. To summaries, the optimal investment in India would be one that creates jobs and introduces technology, rather than one that just replaces the country’s massive work force.