This document examines the contribution of foreign institutional investment in the Indian stock market between March 2007 and February 2012. It finds that there is a positive correlation between foreign institutional investment inflows and the BSE Sensex and S&P CNX NIFTY indices, at 39% and 39.6% respectively. Foreign institutional investment was found to moderately affect both of these Indian stock market indices. The document also provides suggestions to simplify procedures and relax barriers for foreign investors to encourage more foreign investment in India.