A study on foreign direct investment inflows into service sector in India

2026-04-17T06:16:06+00:00

An essential factor in a country’s economic growth is foreign direct investment (FDI). FDI boosts domestic capital,
productivity, and employment, which in turn helps the economy thrive. Many economic sectors rely heavily on FDI
to upgrade their technology, skills, and management capacities. This article aims to analyze the flow of FDI into
India, with a specific focus on the service sector and its changes over time. The study is based on secondary
data sources. The inflow of FDI into India’s service sector is examined using correlation analysis. Secondary data
covering the period 2017–2023 forms the basis of the study. The findings reveal that there has been a decline in
total FDI inflows into India during the past 2 years, while FDI inflows into the service sector increased during the
sameperiod. Thestudyalso examines therelationship between gross domestic product (GDP) and FDI inflows. The
results indicate that FDI has a significant and positive impact on GDP. However, the analysis shows no significant
relationship between Gross Value Added (GVA) from financial services and GDP from the service sector.

Interest rate differentials and exchange rate behavior: a reflective analysis of foreign exchange risk management

2026-06-25T07:39:30+00:00

This paper provides a critical review on the interest rate and exchange rate connection in the field of international foreign exchange risk management. Yet—despite the prevailing interest rate/implied future exchange variance equalization philosophy (old/new theory) and especially the uncovered interest rate parity—measured unemployment aberrations complicate this relationship considerably as a new empirical proof in itself. Evidence indicates that mechanical parity adjustments account for much less of these rates than does a portfolio-consistent model, which incorporates time-varying risk premia, yield-curve dynamics, market volatility, investor behavior, and central bank policy responses. In particular, interest rate differentials are a simple proxy for both prospective return and escalating crash risk as well as the asymmetric payoff and expanding systemic tail-risk bet in a financial crisis. It also suggests that this regime dependence is the result of domestic and external factors. It also points towards priority unanswered questions in the literature surrounding causal interpretation problems, insensitivity across a range of time lags and limitations of classical risk models, which are tail-risk insensitive. The analysis then builds on these lessons to recommend abandoning the discredited practice of static hedging for more flexible state-dependent strategies that can respond to changes in volatility, policy, and structural currency mispricing by multinationals and other financial institutions. At the end of the day, FX risk management is much more than mathematical models: it is a matter of understanding uncertainty, sentiment, and human choice that drives financial realities.

BOHR Journal of Financial Market and Corporate Finance

A study on foreign direct investment inflows into service sector in India

Interest rate differentials and exchange rate behavior: a reflective analysis of foreign exchange risk management