. Hermes and Lensink (2003) and Borensztein et al. (1998), respectively. Moreover, our findings on manufacturing are in line with the cross-country findings on FDI and trade reported in Aizenman and. relationship between the two variables in the primary sector. Most interestingly, and contrary to the widespread view that booming FDI in the services sector is driving growth in India, feedback. Hermes and Lensink 2003). And indeed, some of the studies referred to above do provide first indications that FDI effects in India have become more favorable in the post-reform period. In the...