Economic Affairs, Vol. 63, No. 2, pp. 533-545, June 2018 DOI: 10.30954/0424-2513.2.2018.33 ©2018 New Delhi Publishers. All rights reserved FDI Infow, Export and Economic Growth Relationship in India: An ARDL-Bound Cointegration Approach Kanchan Datta 1 and Abhijit Lahiri 2 1 Department of Economics, University of North Bengal, West Bengal, India 2 Assistant Professor of Commerce, St. Joseph’s College, Darjeeling, West Bengal, India Corresponding author: kanchan.datta@gmail.com / abhijitsjc@gmail.com ABSTRACT There is a debate about the role of Foreign Direct Investment (specially from Developed nations to developing nations) for raising economic growth of the host nation. Some researchers’ support that FDI raises the economic growth of the host country since it brings sophisticated technology, efcient management, raises employment opportunities and flls the gap between domestic savings and investment. Other researchers think that no entrepreneur wants to sacrifce their self interest for interest of a foreign nation. Hence, whatever the positive outcome for FDI infow put forwarded by MNCs or developed nations ultimately these FDI sucks the main juice of a less developed nations and try to keep a control on the central government of that poor nations. Empirical fnding also shows the impacts of FDI on economic growth is not unique. The outcome depends on many factors of the receiving nations. Under these circumstances this paper tries to investigate this FDI infow, Export and economic growth nexus in the economy of India by applying a newly developed econometric tools ARDL Bound Cointegration Approach. Keywords: FDI, Economic Growth, ARDL model, Cointegration, Error Correction Mechanism SECTION -I Concept of Foreign Direct Investment (FDI) Foreign Direct investment (FDI) is investment made for controlling an enterprise operating outside of the economy of the investor or starting a fresh venture in foreign land. An investor based in one country acquires an asset in another country with the intent to manage the asset (OECD, 2000). FDI may give an opportunity to a developing country to bring non- debt foreign resources, technology up gradation, skill enhancement, and new employment. It flls the gap between domestic savings and investments (Ray A.K. & Ghosh, D., 2014). FDI may be categorized as infows and out fows. FDI net inflows are the value of inward direct investment made by non-resident investors in the reporting economy, including reinvested earnings and intra-company loans, net of repatriation of capital and repayment of loans. FDI net outfows are the value of outward direct investment made by the residents of the reporting economy to external economies, including reinvested earnings and intra-company loans, net of receipts from the repatriation of capital and repayment of loans. These series are generally expressed as shares of GDP. These values sometimes may be negative. Negative values of FDI net infows for a particular year show that the value of disinvestment by foreign investors was more than the value of capital newly invested in the reporting economy. Negative values of FDI net outfows show that the value of direct investment made by domestic investors to external economies was less than the value of repatriated (disinvested) direct investment from external economies.