This thesis explores the impact of foreign direct investment (FDI) on economic growth in developing nations. it explores how FDI can serve as a catalyst for development by bringing in not only capital, but also technological transfer and managerial expertise. The thesis shows how the benefits of FDI are not solely dependant on its presence but also require a healthy economic, insititutional, and infrastructural environment along with other factors. Various factors that promote healthy economic growth through FDI are throughly dissected in this study. Through discussion and empirical evidence this thesis also recommends policy implementations that could foster such an environment.