Scribd
Upload
139 views22 pages

Fdi and Its Impact On Indian Economy

- Foreign direct investment (FDI) involves investing directly in production in another country. FDI brings new technologies, capital, skills and management to host nations like India. - Major sectors attracting FDI in India include telecommunications, real estate, power, and retail. Top sources of FDI are Mauritius, Singapore, Netherlands, USA and Japan. - While FDI has advantages, issues remain around unequal distribution across sectors and states. India aims to improve infrastructure, transparency, and ease of doing business to attract more foreign investment.

Uploaded by

Yash Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
139 views22 pages

Fdi and Its Impact On Indian Economy

- Foreign direct investment (FDI) involves investing directly in production in another country. FDI brings new technologies, capital, skills and management to host nations like India. - Major sectors attracting FDI in India include telecommunications, real estate, power, and retail. Top sources of FDI are Mauritius, Singapore, Netherlands, USA and Japan. - While FDI has advantages, issues remain around unequal distribution across sectors and states. India aims to improve infrastructure, transparency, and ease of doing business to attract more foreign investment.

Uploaded by

Yash Agarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 22

FDI AND ITS IMPACT ON

INDIAN ECONOMY
Yash Agarwal
17113132
WHAT IS AN FDI?
■ Foreign Direct Investment(FDI) is investment directly into production in
a country by a company located in another country, either by buying a
company in the target country or by expanding operations of an
existing business in that country.
ADVANTAGES
■ TO COMPANY- ■ TO HOST NATION –
1. Avoiding Foreign Government 1. Source of new technologies,
Pressure for local production capital, processes, products,
organizational technologies and
2. Circumventing Trade Barriers
management skills
3. Capability to increase total
2. Strong impetus to economic
production capacity and sales
development
potential
4. Opportunities for co-production,
joint ventures with local partners,
joint marketing etc
FACTORS AFFECTING FDI

■ Financial Incentives (Funds from local Government)


■ Fiscal incentives ( like Exemption from import duties)
■ Indirect Incentives ( Provides Land and Labour)
■ Political Stability
■ Market Potential and Accessibility
■ Economy Size
WHY INDIA?

■ Liberal, Largest Democracy, Political Stability (Kind of!)


■ Second largest emerging market
■ Skilled, Cheap and Competitive Labour
■ High rates of return on investment
■ Destination for business process outsourcing, knowledge processing
■ BSE is second largest stock exchange in terms of number of companies listed after
NYSE
HISTORY OF FDI IN INDIA
■ FDI was introduced in 1991 by the government for the first time
■ Government allowed FDI upto 51% wherein automatic permission was granted in
high technology and high investment priority industries
■ The limit was raised from 51% to 74% and subsequently to 100%
SECTOR WISE ANALYSIS
RETAIL
■ Government was initially very apprehensive of introduction of FDI in the Retail Sector
■ Unorganised Retail Sector contributes high in market share (98%)
■ FDI is 100% in single brand product (from Jan 2012) and 51% in multi brand(from
Sep 2012)
■ Advantage of huge employment and tax revenue generation
■ A huge disadvantage to unorganised retailers
TELECOMMUNICATION

■ Third Largest sector to attract FDI in India


■ India has a huge existing and potential consumer base
■ India has 100% percent FDI allowed in networking components and 74% FDI in
telecommunication services
■ Introduction of unified access licensing for telecom service on pan-India basis
■ Plan to build India a telecom hub
REAL ESTATE

■ Second most favoured destination for FDI in World (Safe Investment!)


■ Huge Dividends
■ 100% FDI through automatic route was allowed with certain conditions until October
2015
■ Government relaxed the conditions afterwards due to less recovery
POWER

■ India has huge demand


■ FDI will bring in newer technologies
■ 100% through automatic route in Hydro-Electric, Coal and Oil/Gas based Plants
■ Various Tax incentives
■ Boost in demand due to electrification projects
MAJOR INVESTMENTS
Source - Forbes
SOME NUMBERS AND
GRAPHS
Source- Reserve Bank of India
Foreign Direct Investment in India increased by 3812 USD Million in July of 2019.
Foreign Direct Investment in India averaged 1384.16 USD Million from 1995 until 2019,
reaching an all time high of 8569 USD Million in August of 2017 and a record low of -
1336 USD Million in November of 2017
FOREIGN DIRECT INVESTMENT FLOWS TO INDIA:
COUNTRY-WISE (US$ million) 2017-18
South Korea
1% Canada
France Cyprus 1%
1% China 1%
UAE 1% Italy
Switzerland 1% 1% Others
1% 5%

United Kingdom
2%
Hong Kong
3%

Mauritius
Germany
36%
3%
Cayman Islands
3%

Japan
4%

USA
5%

Netherlands
7%

Singapore
25%
FOREIGN DIRECT INVESTMENT FLOWS TO INDIA:
INDUSTRY-WISE (US$ MILLION) 2017-18
Others
Trading
Mining
Education, Research & Development
Real Estate Activities
Restaurants and Hotels
Miscellaneous Services
Transport
Construction
Electricity and other energy Generation, Distribution & Transmission
Business services
Computer Services
Financial Services
Retail & Wholesale Trade
Manufacturing
Communication Services

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000
INDIA VS CHINA :
A CASE STUDY
Cause why not?
China has a higher percentage of GDP as FDI !
ISSUES AND ROAD AHEAD
■ Inequality in sectorial and state wise distribution of FDI
■ Government should push for speedy growth of Infrastructure
■ Make the investment process more transparent and fluid
■ Focus on certain specific sectors for FDIs
■ EASE OF DOING BUSINESS ( A major problem !)
RECENT DEVELOPMENTS

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy