The spillover effects of foreign direct investment in the Indian manufacturing sector are examined by analysing the financial performance of foreign firms with domestic business group firms and stand-alone firms for selected sub-periods during 2001–15. The study shows that the sales efficiency of foreign firms is not significantly different from that of the domestic firms in all the sub-periods studied, except during 2008–09. The operational efficiency of foreign firms is better than that of the domestic firms till 2009 and, for the later period, there is no significant difference in operational efficiency of domestic and foreign firms.
