This study aims to evaluate if foreign direct investment (FDI) impacts sustainable development in India. The study uses time series data from World Bank database for India for a period spanning 1990–2022. For sustainable development, an index representing the three dimensions of sustainability is created using principal component analysis (PCA). Descriptive statistics complemented with autoregressive distributive lag (ARDL) model is implemented on the data collected. The study finds that FDI significantly and positively affects sustainable development in India. This relationship exists not only in the short run but also in the long run. To the best of our knowledge, not many studies have identified the impact of FDI on sustainable development in India, taking indicators of all dimensions of sustainability. The study calls attention to creating policies that focus on attracting and incentivizing FDI that aligns with sustainable development goals. This includes investments in infrastructure, renewable energy, and technology transfer.