This study examines how selected macroeconomic determinants influence India’s economicgrowth, proxied by Gross Value Added (GVA). The analysis focuses on foreign direct investment(FDI) inflows, inflation measured by the Consumer Price Index (CPI), and the exchange rate ofthe Indian rupee against the US dollar. Using secondary annual data for 2005–2025 compiledfrom the World Bank database and the Reserve Bank of India (RBI-DBIE), the study appliesPearson correlation and simple regression techniques to assess the association between themacroeconomic variables and GVA. The results indicate a strong association of GVA with theexchange rate and CPI, while the relationship between FDI inflows and GVA is moderate butpositive, suggesting that FDI remains a relevant contributor to India’s growth performance overthe study period. The findings highlight the importance of macroeconomic stability particularlyprice dynamics and exchange rate movements alongside external capital inflows in shapingIndia’s growth outcomes.
Dr. A. S. Esther Rani (Thu,) studied this question.