This website uses cookies to ensure you have the best experience. Learn more

Foreign Direct Investment In India Analysis

1080 words - 5 pages

Foreign direct investment (FDI) is a direct investment into production or business in a country by a company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. Foreign direct investment has many forms. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra-company loans". In a narrow sense, foreign direct investment ...view middle of the document...

* Government Route
FDI in activities not covered under the automatic route requires prior approval of the Government which are considered by the Foreign Investment Promotion Board (FIPB), Department of Economic Affairs, Ministry of Finance.
Many countries seek FDI for following reasons
(a)   Domestic capital is inadequate for purpose of economic growth;
(b)   Foreign capital is usually essential, at least as a temporary measure, during the period when the capital market is in the process of development;
(c)   Foreign capital usually brings it with other scarce productive factors like technical know-how, business expertise and knowledge.


Foreign Investment Promotion Board (FIPB)
* Expedite clearance process
* Periodically review implementation of cleared proposals
* Review general and sectorial policy guidelines
* Undertake investment promotion activities
Secretariat for Industrial Assistance (SIA)
* Acts as gateway to industrial investment in India
* Assist entrepreneurs & investors in setting up projects
* Liaise with Govt. bodies to seek necessary clearance.
Foreign Investment Implementation Authority (FIIA)
* Quick implementation of FDI approvals
* Resolution of operational difficulties faced by foreign investors
* Gather feedback from foreign investors
Other authorities involved
* Investment Commission
* Project Approval Board
* Reserve Bank of India

In India, Foreign investment was introduced in 1991 under Foreign Exchange Management Act (FEMA), driven by then finance minister Manmohan Singh. As Singh subsequently became a prime minister, this has been one of his top political problems, even in the 2012 election. India disallowed overseas corporate bodies (OCB) to invest in India.
Starting from a baseline of less than $1 billion in 1990, a 2012 UNCTAD survey projected India as the second most important FDI destination after China for transnational corporations during 2010–2012. As per the data, the sectors that attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI. Based on UNCTAD data FDI flows were $10.4 billion, a drop of 43% from the first half of the last year.
India has been ranked at the second place in global foreign direct investments in 2010 and will continue to remain among the top...

Other Papers Like Foreign Direct Investment in India - Analysis

Foreign Direct Investment Essay

1694 words - 7 pages . Despite gigantic opportunity, many foreign investors have been reluctant to enter the South African market due to low economic growth rates, continued political instability, and high security risks. APPLICATION OF THEORY Government policies both encourage and restrict foreign direct investment activities. Foreign direct investment (FDI) can take the form of a foreign firm buying a firm in a different country, or deciding to invest in a different

Foreign Direct Investment Essay

2538 words - 11 pages analysis of locational determinants of Chinese and Indian outward foreign direct investment. Journal of Asia Business Studies, 3(2), 1-15. Gao, L., Liu, X., & Zhou, H. (2013). The role of human mobility in promoting Chinese outward FDI: A neglected factor? International Business Review, 22(2), 437–449. Rasiah, R., Gammeltoft, P., & Yang, J. (2010). Home government policies for outward FDI from emerging economies: lessons from Asia

Foreign Direct Investment

1918 words - 8 pages Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds. Broadly, foreign direct

Foreign Direct Investment - 823 words

823 words - 4 pages Foreign Direct Investment (FDI): Funds invested by an MNC and one nation for starting, acquiring, or expanding an enterprise in another nation. Three reasons corporations make foreign direct investments: To seek access to new markets To grow beyond a small domestic market To achieve cost and other competitive advantages over competitors Foreign direct investment (FDI) is an investment in a business by an investor from another

Foreign Direct Investment - 1056 words

1056 words - 5 pages Foreign Direct Investment Joining Forces Foreign direct investment methods · Investment in a joint venture in a foreign market · Mergers and acquisitions · Greenfield investment Reasons for foreign direct · Some governments prohibit or limit imports of goods produced in other countries · Producing goods in the target market avoids import duties and other taxes and the requirements for import permits · Companies can obtain the

Foreign Direct Investment - 1349 words

1349 words - 6 pages industrial space. The foreign direct investment is expected to increase on a steady pace. 4 Free Zones around the World Shannon Shenzen Tianjing Incheon Jebel Ali Panama Singapore South Africa The best combination of these models suggests the following are critical factors for their success: Proximity to markets Preferential market access (trade agreements) Access to ports, infrastructure Availability of human talent for

International Trade and Foreign Direct Investment

755 words - 4 pages countries. International trade is a source of job opportunities and also leads to development of economic activity in every part of the trading country. The main values of International trades are better margins, a way to grow one’s business, less competition and diversify risk. 2. FDI: definition and different types. The movement of capital across borders better known as Foreign Direct Investment is an investment in a business by an

The Effects Of Foreign Direct Investment (Fdi) On The Economic Growth Of China

1550 words - 7 pages The purpose of this paper is to examine the effects of foreign direct investment (FDI) on the economic growth of China. Such growth was achieved through China taking in tremendous amounts in FDI, increasing its productivity, especially in the export manufacturing sector of the economy. This paper provides mounting evidence that China’s growth has been largely fuelled by FDI through capital formation, export promotion, technological and skill

Trends In Foreign Direct Investments

1967 words - 8 pages Trends in Foreign Direct Investment Inflows This article briefly examines recent trends in foreign direct investment in Australia, both in the context of the longer-term perspective and relative to the experience of other countries. It also discusses the role of foreign direct investment within Australia’s overall investment requirements, and outlines characteristics of foreign direct investment in relation to sector and type of asset acquired

‘Investment and Support from Foreign Powers Was the Main Reason the Weimar Republic Survived in the 1920s.’ How Far Do You Agree?

752 words - 4 pages ‘Investment and support from foreign powers was the main reason the Weimar Republic survived in the 1920s.’ How far do you agree? During the 1920s, there were many ups and downs for Weimar Germany and to start with they struggled and bounced between governments, especially with hyperinflation in 1923. But with the help of foreign support, Weimar was able to make it to the 1930s. It could be said that the Locarno Pact contributed greatly to the

Case Analysis Of Ban Of Tobacco Advertising In India

927 words - 4 pages Case Analysis of ban of tobacco advertising in India Here is the brief background information. On Feb 6, 2001 Indian government announced they were going to enforce a ban regarding tobacco advertising in their country. Banning included barring tobacco industries from advertising their products, sponsoring sport or cultural events. The ban was aimed to discourage young mind in India to take part in smoking. The ban, however, heated a debate

Related Essays

Foreign Direct Investment In India Essay

975 words - 4 pages Foreign Direct Investment in India India is the largest democracy and is fourth largest economy (in terms of purchasing power parity) in the world. India with its consistent growth performance and abundant high-skilled manpower provides enormous opportunity for investment, both domestic and foreign. Investment in India can be made both by non-resident as well as resident Indian entities. Any non-resident investing in an Indian company is

Foreign Direct Investment Essay 4094 Words

4094 words - 17 pages . The dependent variable of foreign direct investment is measured by net inflow of foreign direct investment (FDI). All the variables are in terms of Malaysian Ringgit (RM). Method of Analysis For this study, Statistical Package Social Science (SPSS) is used to analyse all the data collection and interpret the result findings. The raw data collected in the field must be transformed into information that will answer the researcher’s questions in

Foreign Direct Investment Essay 5163 Words

5163 words - 21 pages Bangladeshis working overseas, mainly in the Middle East is the major source of foreign exchange earnings; exports of garments and textiles are the other main sources of foreign exchange earning. GDP's rapid growth due to sound financial control and regulations has also contributed to its growth. However, foreign direct investment is yet to rise significantly. Bangladesh has made major strides in its human development index published recently

Foreign Direct Investment Essay 4633 Words

4633 words - 19 pages Determining FDI Potential: Are National Policies and Incentives Sufficient? Foreign direct investment (FDI) is increasingly becoming a preferred form of capital flows to developing countries in recent years, as compared to other forms of capital flows. The reasons for this are not hard to seek. In the context of the gloom and despair of the heavy debt burden plaguing these countries, FDI promises to be the bright ray of hope for