This thesis aims to examine the spatial distribution of Foreign Direct Investment (FDI) and manufacturing sector in India. This study contains three main parts: (i) Spatial distribution of FDI and its impact on indus trial agglomeration; (ii) Coagglomeration of formal and informal manufacturing sector and plant level productivity; and (iii) FDI agglomeration in India. The system GMM estimation results show that FDI has a negative impact on the industrial agglomeration during the study period (2006-2015). Further, the findings of this study also suggests that industrial agglomeration is highly dependent on its history than the other industry and regional characteristics. The analysis of the impact of coagglomeration of formal and informal sector on plant level productivity suggest that co-location of formal sector with informal sector facilitate productivity enhancement for the formal manufacturing plants. On the other hand, informal manufacturing plants experience productivity enhancement through the migration towards urban regions. The impact of country of origin and industry sector of prior foreign investments on the location choice of a new foreign entrant. Using conditional logit estimation strategy, we identify both country of origin and industry sector of prior investment has significant impact on the location choice of new investments.