This paper uses a qualitative approach rather than trying to quantify the effects of FDI in India. This involves identifying sectors where US investment is relatively high, followed by an assessment of impact in forms such employment creation, contribution to exports,technology transfers, etc. While there are many studies examining this issue quantitatively, there are problems associated with availability of data, prevalence of informal markets and unorganized information flows in developing countries. Also, the methodologies adopted in many econometric studies are unable to distinguish between various channels through which FDI affects the host economy (Javorik, 2008).