ABSTRACT Before 1991, India's narrow minded development strategy was based on self - reliance and import substitution, with a negligible focus towards foreign investment or private commercial flows. India’s economic reforms began in 1991 & these (reforms) recognised the need for a system change, involving liberalisation of government controls, a larger role for the private sector and greater integration with the world economy. Thus, India, is a latecomer to welcome FDI (now one of the primary reason's for India's economic progress), but, even then India is among the favourite destinations for foreign investors. The research paper aims to assess the current FDI situation in India and outline the future prospects. Data has been gathered through secondary sources like reports and publication of Govt., RBI, DIPP, UNCTAD relating to foreign investment.