Indian economy has witnessed a positive shift in the perception of the role played by Foreign Direct Investment (FDI) from an era of concern and suspicion to the most important source of external finance for developing countries. Associated with bringing positive externalities and greatly augmenting domestic capital, FDI is sought by many countries. In the present scenario, employment creation is regarded as one of the important potential contributions made by FDI to the host economy. Thus, the study makes an attempt to analyze the impact of Foreign Direct Investment on employment in Indian Pharmaceutical Industry using recent firm level panel data for the time frame of fifteen years (2001-2015). Our analysis broadly concludes that increased FDI flows have led to higher levels of employment. It is also observed that export intensity and size positively affect the employment while capital intensity has a negative impact. A significant policy direction that emerges from the study is that in order to improve the employment, exports in the labor intensive industries should be encouraged.