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Infrastructure Development and Foreign Direct Investment on the Western Coast of India

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  • Prabha Shastri Ranade

Abstract

This paper aims to analyse recent trends in spatial distribution of foreign direct investment on the western coast of India after completion of Konkan Railway-a major infrastructure project along the western coast. It investigates the impact of Konkan Railway on foreign direct investment (FDI) in infrastructure and other sectors in its adjoining areas. This 760 km long railway line connecting Mumbai, India 's commercial capital with Mangalore in the south was commissioned in January 1998. FD! proposals approved by the Government of India to be located on the west coast south of Mumbai, up to Kera/a after the commissioning of Konkan Railway, i.e. from January 1998 to January 2000 are taken into consideration for this study. The study reveals that infrastructure development has a positive impact on FD! on the western coast. With the commencement of construction of Konkan Railway, several other infrastructure projects were also undertaken here. The variety of sectors towards which FDI is attracted in the western coast is noteworthy. The sector, hotel and tourism attracts the maximum attention among all the sectors. Out of 77 FDI proposals approved i11 India during this period, 35 are located in the western coast. These are primarily located at Mumbai, Goa and Kerala. This suggests that the investors are seeking locations in or around the capital or the core region in order to gain access to local market and to minimise cost involved in accessing the local market.

Suggested Citation

  • Prabha Shastri Ranade, 2001. "Infrastructure Development and Foreign Direct Investment on the Western Coast of India," Foreign Trade Review, , vol. 35(4), pages 38-54, January.
    • Handle: RePEc:sae:fortra:v:35:y:2001:i:4:p:38-54
    DOI: 10.1177/0015732515010404
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