INTERNATIONAL JOURNAL OF ADVANCE RESEARCH
IN MULTIDISCIPLINARY

The research study examines the role of Foreign Direct Investment (FDI) in India's industrial growth, employing a simple linear regression model to analyze the relationship between FDI and the Index of Industrial Production (IIP). The analysis reveals a statistically significant positive correlation between FDI and IIP, with a regression coefficient of 0.245, suggesting that a one-unit increase in FDI is associated with a 0.245-unit increase in IIP. The model explains approximately 45.61% of the variation in IIP, as indicated by an R-squared value of 0.4561. While these findings provide evidence for a positive link between FDI and industrial growth in India, it is crucial to acknowledge the limitations of this model. The analysis accounts for only one independent variable (FDI) and thus does not capture the influence of other potentially significant factors on IIP. Furthermore, the study demonstrates correlation, not causation. It also studied the trends of FDI inflows into Telangana state, which fluctuated between 2015 and 2024. After a steady rise from ₹8,326 crore in 2015 to ₹14,767 crore in 2017, inflows dipped to ₹8,037 crore in 2018 before surging to ₹23,882 crore in 2019. Subsequent years saw further volatility, with a low of ₹8,447 crore in 2020 and a peak of ₹25,094 crore in 2024. This inconsistent pattern suggests that FDI inflows are influenced by various factors, requiring further investigation into sectoral trends, policy impacts, and global economic conditions to understand the underlying drivers and long-term implications for Telangana's economy.