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Importance of Foreign Investment Investing in a country by individuals and organizations from other countries is known as international investment. Economic development depends on it. Growing economies like India and China have high populations, making economic growth the only sustainable means of raising living standards. As more inputs are brought into the production process, investment advances economic growth. In the current international economic set up where countries progress towards globalization, foreign capital is indispensable and caters to the large requirements of capital for the economic development. This form of capital flows are usually welcomed by developing countries for the reason that they add to the total investible resources country. It also acts as a vehicle for the transfer of technology and management. In these days technology is very much required for the rapid economic development. Foreign investment is becoming more important in developing countries.