Abstract

Abstract
Most of developing countries Facing problematic in providing the resources necessary to finance the investment process, and suffer from a decline in average per capita income and low rates of growth in gross domestic product compared with developed countries , and thus low levels of investment, which lead to causing a deficiency in funds needed to finance development, so headed towards the international finance market through foreign investment, both direct and indirect to bridge the gap between domestic savings and investment, where India has seen liberal financially in 1991, representing in economic reform policies, is following floating exchange rate regime and the lifting of trade restrictions and address the imbalance in the balance of payments and the expansion of privatization processes, All this has helped in attracting more foreign investment, including portfolio investment, which rose as a proportion of total foreign investment from (3%) in 1992 to (85.9%) in 1994, the study showed a positive relationship between indirect foreign investment and many economic variables in India, such as gross domestic product, money supply (the narrow sense) , savings and the level of prices and consumption.