Technology is a key driver of economic growth, and its role in the growth process has attracted considerable attention in the literature. Although countries may achieve a higher standard of living, for example through a higher rate of capital accumulation, they cannot sustain high economic growth without continuous technological progress. The present paper attempts to examine the various phases of technological development in India since independence. It reveals that India relied on a policy of import substitution for a long period, which resulted in slow economic growth for many years. The paper also examines the crucial role of foreign direct investment (FDI) as a channel for gaining access to technologies developed abroad. It is observed that FDI has been widely recognized as a key modality for the acquisition of sophisticated and advanced technologies by developing nations. Moreover, it helps to increase the productive capacity of the economy. Although the Government of India introduced a paradigm shift in FDI policy in 1991, further efforts are still required to encourage foreign investors.