FDI refers to capital inflows from abroad that are invested in or to enhance the production capacity of the economy. Despite globalization, the essential role of foreign direct investment (FDI) in economic development has not changed. However, many mechanisms and dynamics of FDI -assisted development have changed: there is greater variation in the kinds of FDI, the benefits each offers, and the manner in which each interacts with the host economy.FDI seen as an important catalyst for economic growth in the developing countries, It affects the economic growth by Stimulating domestic investment, increasing human capital formation and by facilitating the technology transfer in the host countries. Paper shows the advantage and disadvantage of FDI and also the growth in India of FDI.