ABSTRACT:- FDI in-flows and out-flows have increased dramatically during the last 30 years; with a rapid growth after globalization. The inflow of FDI was significant after 1990s compared to that during1970s and earlier. Emerging economies like China and India have been receiving high amount of FDI after 2010 than what they received earlier.
FDI inflows impact the balance of payments of host countries via strengthening export-orientated and import-substituting economy. Against this background, an attempt is made to find-out the impact of FDI in-flows on balance of payments in terms of current account balances of top-20 FDI recipient countries with special reference to India. The study indicated mixed conclusions. However, FDI inflows helped India to contain negative balance of current account along with positive balance of net invisibles. It is suggested that the counties receiving large amounts of FDI should concentrate on strengthening export-orientated and import-substituting economy to enjoy the fruits of inflow of FDI and consequently acquire core competencies.

Key Words:- Foreign Direct Investment, Current Account Balance, Trade Balance, Net Invisibles, Exports, and Imports,

Acronyms Used: FDI= Foreign Direct Investment, USA=United States of America, UK=United Kingdom, UNCTAD= United Nations Conference on Trade and Development, M&A= Mergers and Acquisitions, US$= United States Dollars.