Foreign direct investment is an integral part of an open effective international economic system and a major means to development. Foreign direct investment is recognised as a powerful engine for economic growth. FDI brings complementary assets such as technology, management and organizational competencies and there are spill over effects of these assets on the rest of the economy. The purpose of this paper is to analyse the determinants of FDI, sources of FDI inflows in India during the financial year 2016-2017 since, encouragement of FDI is an integral part of the economic reforms process of developing nations because it is seen as an instrument of technology transfer, managerial skill, and augmentation of foreign exchange reserves and globalization of the economy. Economic growth, continuing trade regimes, and increased competition among firms are likely to derive the global expansion of MNC activity.