Impact of Foreign Direct Investment on Economic Growth of Selected South Asian Countries Coming Soon

This study examines the impact of Foreign Direct Investment (FDI) on economic growth in selected South Asian countries, namely India, Bangladesh, Bhutan, and Nepal. FDI is considered a key driver of economic development, particularly for developing economies facing limitations in domestic capital, technology, and managerial expertise. The research aims to analyze the relationship between FDI inflows and GDP growth, while also considering the role of supporting factors such as trade openness, human capital, inflation, and domestic investment. The study adopts a quantitative approach using panel data analysis over the period 2000–2020. Secondary data is collected from reliable sources including the World Bank, IMF, and UNCTAD. Statistical techniques such as descriptive analysis, correlation, and regression models (fixed and random effects) are employed to evaluate the relationship between variables. The findings reveal that FDI has a positive and significant impact on economic growth in all selected countries, although the magnitude of this effect varies. India and Bangladesh show stronger relationships due to better infrastructure, policy frameworks, and market size, while Bhutan and Nepal experience more moderate impacts due to structural and institutional constraints. The study also highlights the importance of sectoral distribution, policy environment, and absorptive capacity in maximizing the benefits of FDI. Overall, the research concludes that FDI contributes to economic growth, but its effectiveness depends on complementary factors such as human capital, stable policies, and domestic investment. The study suggests that policymakers should focus not only on attracting FDI but also on strengthening domestic conditions to ensure sustainable and inclusive economic development.