Foreign Direct Investment in South Asia: Policy, Trends, Impact and Determinants

All five South Asian countries (India, Pakistan, Bangladesh, Sri Lanka and Nepal) have been following consistent economic reform policy measures emphasizing the market economy and aimed at integrating their economies with the rest of the world. Consequently, all except Pakistan have experienced higher economic growth and an improvement in most macro economic indicators both in the domestic and external sector. Indeed, the South Asian region has been one of the fastest growing regions in the world in recent years. Overall, the FDI environment has undergone a sea change in South Asian countries during the 1990s, and more so in recent years. With their liberalized approach to FDI and constant changes in improving the FDI policy framework, it is certain that…