FDI and Inequality: A Comparative Study of India and Japan

Romeer Rao

Abstract: The paper explores the relationship between foreign direct investment (FDI) and income inequality, using India and Japan as case studies. Despite similar levels of FDI, these countries exhibit different levels of inequality. The paper argues that factors beyond economic development, such as education systems, FDI distribution, and government policies, play crucial roles in shaping this relationship. The paper demonstrates that the relationship between FDI and income inequality is complex and influenced by factors beyond economic development. Understanding these factors is essential for policymakers seeking to harness the benefits of FDI while mitigating its potential negative impacts on inequality.

Keywords: Income Inequality, FDI, India, Japan