Publication

This paper assesses the determinants of India’s FDI outflows across a large sample of host countries in the 1996-2009 period. Major findings include: India’s outward FDI is hardly affected by motives to access raw materials or superior technologies. Market-related factors appear to have dominated the location choices of Indian direct investors. A larger Indian diaspora in the host countries attracts more FDI. Finally, it seems that Indian direct investors are relatively resilient to weak institutions and economic instability in the host countries. However, the authors do not find robust evidence that India provides an alternative source of FDI for countries that traditional investors tend to avoid.