Innovation in the Financial Sector and FDI’s Contribution to Economic Growth – A Study

Abstract

The Indian economy is expanding at a rapid rate, and recent years have seen substantial changes in the country's financial sector. These changes have been spurred by innovation and Foreign Direct Investment (FDI). The purpose of this abstract is to investigate the connection that exists between innovation in India's financial industry and the role that foreign direct investment plays in the expansion of the Indian economy. This paper investigates how foreign direct investment (FDI) has led to increased levels of innovation, technical advancement, and overall productivity in India's financial sector, which has ultimately resulted in increased levels of economic growth. In recent years, the Indian financial sector has been subjected to significant change, which has been driven by developments in technology, changes in regulatory policies, and shifting preferences on the part of consumers. The advancement of financial technology, sometimes known as "FinTech," has been an important factor in India's efforts to increase access to financial services, advance the cause of financial inclusion, and boost the effectiveness of the country's financial ecosystem. Foreign direct investment has quickly become an important source of finance, technological advancement, and professional knowledge for India's financial sector. The expansion and innovation of domestic financial institutions is facilitated by the introduction of financial resources, knowledge, and best practices from throughout the world brought in by foreign investors. This abstract makes the case that Foreign Direct Investment (FDI) is an essential factor in both the promotion of innovation within India's financial industry and the acceleration of overall economic growth.