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Stream/Area:
-
Subject:
-
Paper ID:
IJSREM64004
Volume:
10 |
5 |
May 2026
Pages:
1-13
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
Assistant Professor, Department of Economics
Ranchi University, Ranchi
Department of Economics
Ranchi University, Ranchi
Investment in the Computer Software and Hardware sector by Foreign Direct Investors (FDI) has become an important source of innovation, economic growth, and international competitiveness, especially in the fast changing digital economy. This research offers an in-depth analysis of the FDI trends in the computer software and hardware sector of India between 2000 and 2021, including growth trends and macroeconomic and technological factors that affect investment decisions The study reveals several periods of FDI inflows, starting with initial fluctuations during the dot-com bubble and then stabilisation, followed by a downturn during the global financial crisis (2007-2009) and post-global financial crisis resurgence. In particular, a major growth is noted post 2014, with digital transformation programs, regulatory reforms and global IT services expansion, with an all-time high in 2020-21 attributed to a rapid digitalisation during the COVID-19 pandemic. The research uses trend analysis, moving averages, and growth rate analysis, backed by a linear regression model, which shows a moderate correlation between time and FDI inflows, and the significance of other factors such as policy reforms, technological change and the international economic environment. The study highlights the critical role of FDI in promoting technology absorption, human capital development, employment generation and participation of domestic industries in the global value chain. Moreover, the research highlights the role of conducive policy regimes such as liberalization, fiscal incentives, regulatory regimes and intellectual property rights (IPR) protection in promoting long-term FDI inflows. In summary, the study reveals that FDI in the computer software and hardware industry is crucial for building a knowledge-based economy and enhancing India's status as an IT hub. But for long-term growth, the issues of infrastructure, cyber security and regulatory stability need to be overcome
KEYWORDS
FDI inflow in Computer Software and Hardware industry is characterized by various stages that are influenced by the global economic cycles, technology and demand. The industry was characterized by a boom (2000-2005) at the beginning because of the dot-com boom but then a downfall amidst the global financial crisis (2007-2009). The process of recovery started after the crisis, and by 2015, the industry was experiencing a boom because of cloud computing, mobile technologies, and digital transformation. Investment was further pushed up by the COVID-19 pandemic, with the level of FDI dramatically increasing in 2020-21. The trend underscores the growing global dependency on technology and the current digital revolution in industries. The role of FDI inflows in the Computer Software and Hardware sector is indisputable. It spurs technological innovations, contributes to economic development, generates high-quality employment, contributes to skills development and assimilates countries into the global technology market. Moreover, FDI expedites the process of building knowledge-based economies, and countries can become more competitive in the digital era. Considering the high-rate of technological growth and the growing need of digital solutions, FDI will remain the key determinant of the future of computer software and hardware industries. FDI inflows policies in the computer software and hardware industries are important to determine the investment environment and technological innovation. Those countries that embrace liberalization policy, give incentives to innovations, and effectively regulate foreign investments and safeguard intellectual property tend to capture high FDI. With the ever changing nature of the global digital economy, governments have to balance between attracting foreign investment and protecting national interests in such a way that they can guarantee that the rewards of FDI are made to translate into sustainable economic growth and technological development.
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Publication Date
5/25/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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