According to United Nations (UN) reports, India has been ranked among the top three global investment destinations and also according to other international sources. For the Indian economy, which has enormous potential, foreign direct investment has a positive impact. It has helped create new companies, as well as improve technology and skills through foreign direct investment inflows. This in turn develops the Indian economy. Considering the various advantages and disadvantages of FDI, the anxiety and fear of investments have completely subsided as the brighter picture suggests that they have an immense impact on the development side in building the growth rate of the economy. Overall, to help develop the Indian economy, the government should follow the right model and encourage FDI as it plays an important role and the future depends on the benefits of FDI.