Foreign Direct Investment (FDI) has become one of the most important sources of economic growth in India. Since the economic reforms of 1991, India has opened its doors to foreign investors, leading to increased capital inflow, technology transfer, employment generation, and infrastructure development. This paper explains the meaning of FDI, its need and importance for India, the routes through which FDI enters the country, and its advantages and disadvantages. The study is based on secondary sources such as books, journals, and official reports. The paper concludes that while FDI has greatly supported India’s economic development, it should be regulated carefully to protect domestic industries and maintain economic balance.