One of the most notable features of economic globalization has been the increased importance of Foreign Direct Investment around the World. FDI has the potential to generate employment, raise productivity, enhancing competitiveness of the domestic economy through transfer of skills and technology, enhance exports and contribute to the long-term economic development of the nations. FDI in health care sector has gathered momentum in the recent years. Since January 2000, FDI is permitted up to 100 per cent under the automatic route in hospitals in India. FDI is allowed across the industries and sectors, has proven that foreign investors have faith in the resilience of Indian markets. FDI and GDP are positively correlated with each other and the country’s GDP is showing a positive movement with flow of Foreign Direct Investment in India. The flow of FII and FDI also shows the positive correlation with each other.