With the initiation of globalisation, developing countries, significantly those in Asia, are witnessing a Brobdingnagian surge of FDI inflows throughout the past 2 decades. Even tho' India has been a arriver to the FDI scene compared to alternative East Asian countries, its substantial market potential and a liberalized policy regime has sustained its attraction as a favourable destination for foreign investors. This analysis paper aims to examine the impact of FDI on the Indian economy, significantly when 2 decades of economic reforms, and analyzes the challenges to position itself favorably within the international competition for FDI. The paper provides the major policy implications from this analysis, besides drawing attention on the complexities in decoding FDI knowledge in India.