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The IntroductionForeign direct investment (FDI) is probably one of the most significant factors leading to globalization of the international economy. The influx of FDI to developing countries increased significantly in 90 years and now represents about 40 percent of global trends FDI.Similar also have been observed in India. The foreign direct investment in India has espanto quickly after the liberalization program began in the early 90. The immediate challenge before the Congress government formed in 1991 is to overcome the severe economic crisis and lead the economy towards a continuous development. Economic development to accelerate the liberalization and globalization has made it necessary not only dismantling the rules and regulations severely but also called foreign capital and technology. It also meant the restructuring of its trade regime to prepare the economy for greater integration with the global economy. Gradually the interaction and interdependence of economic and foreign policies have intensified during the first half of the 90. Situation the process of economic liberalization in the context of wider foreign policy to explore the interaction between economics and politics in India during the period of 1990-1995. Moving from the main political strategy is oriented towards a more external main through the development of export has attracted the interest of foreign investors in India. Figure 1 shows this trend in the level of annual turnout of both the actual FDI for the period 1997-2004Figure: 1 real FDI (net) 1997-2004Source: Economic Survey 2004-2005, (turnout of http:/indiabudget.nic.in ) Aggregate the FDI in India was somewhat lower during 2003-04 than during 2002-03. The reduction is attributable to a small decline (U.S. $ 379 million) in fresh influx of capital owner in 2003-04. The reinvested earnings during 2003-04 to U.S. $ 1.8 billion were more or less the same as in 2002-03. The FDI flows in India, based on bop, after having risen sharply from 1999-2000, is showing a decline from 2001-02. The FDI (net) undertaken by Indian companies overseas, was also lower at U.S. $ 1.3 billion during 2003-04, compared to U.S. $ 1.8 billion in 2002-03.India position seems quite attractive to many foreign multinational enterprises (MNEs) due to favorable factors such as high economic growth, rapid population growth, people, more low-cost English-speaking workers for more etcEarlier there were relatively few empirical studies that have examined the decisions ubicazionali of MNEs who choose India as an investment location . Previous studies have counted more sull'accumulazione of primary data using perceptions guidelines for the measurement of the explanatory factors. The rapid growth of FDI and its increasing importance, is critical to ensure both the public and private sectors have a complete understanding of the macro-economic determinants of this phenomenon as possible. Building on earlier literature fire of this paper is on the determinants of location-related FDI. This is undertaken through an analysis of time series of factors arising from urtano important that the level of turnout of FDI for the period 1997-determinants 2004.Locational Company of direct foreign investment becomes multinational mainly for three reasons . There are advantages of ownership advantages of location-specific and internalization. In this study, we focus on the benefits of location-specific host country as determinants of FDI to represent the geographical distribution of inflows of FDI through economies of transition. The great importance of the market, the proximity of the internal market, work at low cost and favorable treatment in the host country all the tax benefits are considered as position. At the same time, also refer to specific transitional issues such as changes in macroeconomic and institutional environments. the advantages of location-specific are further classified by three types of reasons FDI.First, the investment of research has decided to support existing markets or to exploit new markets. For example, due to tariffs and other barriers, the company has redeployed production to the host country where it was previously served by exporting. Secondly, when companies invest abroad to acquire resources not available in the country of origin, investment is denominated asset or well-seek. The resources may be natural resources, raw materials, or input as a low-cost work. Thirdly, the investment is rationalized or efficiency-cercante when the company can gain from joint control of geographically dispersed in the presence of economies of scale and scope. This study, which mainly focuses on the host country has based factors. The factors or elements of the host country can be grouped into two categories, the first group contains natural resources, most kinds of work and the closeness of the market. The second group contains a range of environmental variables that behave according to the political, economic, legal and infrastructure of a country. The model and variablesThough that the literature has suggested on several explanatory variables as possible, it is not possible to include everyone. The main test for the reduction in the number of variables are as follows: (i) Value and importance of the variable for India, (ii) Availability of data, (iii) Degrees of Freedom; The economic model is specified as: FDI = f (ms, OE / FT, I, DMA, EE, IE) ———— (1) Where FDI = foreign direct investment, ms = size of the internal market, OE / FT = Open economy to foreign trade, I = infrastructure of the host country, DMA = attractiveness of the domestic market, EE = external economic stability, IE = internal economic stability. The economic theory suggests that a positive relationship between FDI and the format of the internal market, opening the economy to foreign trade and the infrastructure of the country. While a negative relationship between FDI and external economic stability, internal economic stability. The bigger the importance of the market, plus the request of the goods or services to be provided by FDI.Figure: 2Figure 2 shows that figure and from 2006 to 2004 the years for internal and external values of FDI 3 shows the comparative statement of FDI towards 'inside and outside of India and China for the years 1990 to 2000. These details have made the image of free importance of factors arising from the attraction of foreign direct investment into the country. As is evident from these figures that India has only very recently emerged as a destination for FDI from preriforma the years have been marked by sharp un'antipatia toward foreign capital unless under certain circumstances. The data on some real influx of FDI in different sectors are not available. According to the data of the € œ the approvals of the â € it seems that much of FDI is directed towards the infrastructure and energy sectors. More approvals were made in the nonmanufacturing sector than in manufacturing. The fields of metallurgy, power and fuel saw the most development with falls in transport, food processing and industrial machinery. Figure: The 3The services sector (including telecommunications) has increased its part during 1992-94 but this development has been released out of the deficit in the request. For several key items (such as education, health, roads (excluding motorways), electricity, property rights and so on.) Lies within the jurisdiction of different conditions, the progress of administrative reforms to the level of governments state is a major determinant of the outcome of the level of economic conditions during several years including development, investment, infrastructure and attractiveness of the product's internal condition as destinations of FDI. In the past decade FDI approvals have varied considerably over the geographical scope of India. Four conditions ie Karnataka, Maharashtra, Tamilnadu and Goudjerate represented more than one third of total FDI approvals. The shares of these different conditions were respectively 7.6%, 13.7%, 6.7% and 5.3%. The shares of other important conditions were considerably lower: The West Bengal (3.7%), Andhra Pradesh (4.2%), Madhya Pradesh (4.5%) and Orissa (3.8%). The parts of Kerala and Haryana, Punjab and Ragiastan were comparatively smaller while the flow of FDI in such conditions populated Bihar and Uttar Pradesh was virtually negligible. The rate of approval has increased considerably and the influence on FDI flows in India. The S.U.A. are the largest investor in India with investment of overRs. 570 billion (as on 2002). It would be easier if we could see the comparison test of FDI in the sector and the corresponding values of GDP Figure 4 shows the comparative information for the recent period. From what we could understand the rates of real growth sector in GDP for the years 2000 to 2005. The lowest contribution of services relating to development of GDP in recent years is partly because of its lower part in GDP properly and does not block the signs of industrial resurrection. Firstly, the development of the industrial sector, from a low of 2.7 percent in 2001-02, has revived to 7.1 percent and 7.4 percent in 2002-03 and 2003-04 respectively and after being accelerated beyond to 9.5 percent during the next two years, moving 10.0 percent in 2006-07. Secondly, development of industry as a proportion of its development in services, which was 78.9 percent on average between 1991-92 and 1999-2000, with improved 88.7 percent during the past seven years. Figure: rates of real growth in industrial development 4Sectoral of GDP at factor cost (at 1999-2000 prices) would have been even higher had it not been for a relatively disappointing performance of the other two subsettori, ie, of mineral extraction and mining, water supply and electricity, gas e. The industry has grown steadily ever more than seven percent annually for more than three years in a row before 2004-05. Each year, manufacture, according to the monthly index of industrial production (IIP) available until December 2006, is growing each month from March 2006 to double-digit rates. The information from the table above may be compared to real

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