This paper investigates the relationship between foreign direct investment (FDI) and employment opportunities in India. To investigate, they used coefficients of forward and backward linkages between foreign affiliates and local firms are also included to critically examine the impact of FDI on employment generation in India. Data for the present study was derived from the website of DIPP, MSME annual report, CSO, India and Economic survey report (2020-21) from the period 2006-2017 (due to unavailability of data). The empirical result shows that neither FDI create backward linkages with local firms nor foreign affiliates that have evidence of employment generation in the MSME sector in India. FDI creates only forward linkages with local firms to outsource or distribute their products to end consumers, the “market-seeking” motive of FDI. This study will help policymakers and government understand domestic firms' lacuna, FDI policy, and the channelization of foreign investment in manufacturing.