Foreign Direct Investment (FDI) plays a fundamental role in the long-term economic development of a nation, not only as a source of capital but also for enhancing competitiveness of the domestic economy through transfer of technology, strengthening infrastructure, raising productivity & generating new employment opportunities. India has consistently been classified as among the most attractive investment destination by a various reputed international rating organizations. With its highly skilled & cost-effective manpower, it offers immense opportunities not only for Business Process Outsourcing but increasingly for the higher end of value chain in Knowledge Process Outsourcing & Engineering Process Outsourcing. A continuous review of the FDI policy & the associated procedures which includes, progressive simplification of procedures, dispensing with the need of multiple approvals from the regulatory authorities, extending the automatic route to more to more sectors, & allowing FDI in new sectors, is earnestly undertaken to create a more liberal, attractive & conducive investment climate.