Presentation on Foreign Direct Investment

(404)

Presented By: Submitted To:

Sachin Patil Mr. Anil Sharma
MBA II, NMU (40) .
IMPACT OF FDI IN INDIAN ECONOMY

INTRODUCTION TO FDI:

Foreign Direct investment is the

investment, which is made to serve the
business interests of the investor in a
company, which is in a different nation
distinction from the investor’s country of
the origin.
 TYPES OF FDI

BY BY BY
DIRECTION TARGET MOTIVE

INWARD GREENFIELD RESOURCE

SEEKING
INVESTMENT
MARKET
OUTWARD
SEEKING
HORIZONTAL FDI
EFFICIENCY
VERTICAL FDI SEEKING

05
FOREIGN DIRECT INVESTMENT (FDI)

 Foreign Direct Investment (FDI) means a company or any

other entity in one country making a physical investment in
other country.
 FDI includes investments made to acquire a lasting interest in
enterprises that are operating outside the economy &
national borders of an investor.
 FDI (for a country) represents foreign assets in domestic
structures, equipments & organizations.
 FDI does not include foreign investments in stock markets.
 INVESTMENT OUTFLOW

INVESTOR RECEIVER
(HOME COUNTRY) (FOREIGN COUNTRY)

INVESTMENT INFLOW

RECEIVER INVESTOR
(HOME COUNTRY) (FOREIGN COUNTRY)

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BENEFTS OF FDI

 INFLOW OF CAPITAL IN HOME COUNTRY

 REPATRIATION OF PROFITS BY INVESTOR
 TECHNOLOGY DEVELOPMENT & TRANSFER
 TRANSFER OF KNOWLEDGE
 ACCESS TO NEW MARKETS
 FDI LED EXPORT GROWTH
 EMPLOYMENT GENERATION
 INFRASTRUCTURE DEVELOPMENT IN HOME COUNTRY
 LEADS TO LIBERALIZATION & GLOBALIZATION
ADVANTAGES OF FDI:

 FDI develops the economy of both host and

home country.

 FDI permits the technology transfers.

 Employee enrichment in training and

operations.

 It creates new jobs and advanced technology.

 It pays an avenue to receive the funds in lower

rate of interests.
DISADVANTAGES OF FDI:

 There is a chance to spread the national

secrets.

 The host country workers may dissatisfy with

the policies.

 Problem in language and culture.

 Size and condition of the market to the

advanced technology.

 Government faces the problem to control the

operations of host country FDI.
ROLE OF FDI ON INDIAN ECONOMY:

FDI plays a major role in Indian economy,

FDI creates lot of new opening and hike in
individual salary because of it the life style get
developed so automatically the growth of the
economy get leveraged.
 FDI POLICY IN INDIA

The Government of India has put in place a liberal, transparent and

investor – friendly FDI Policy, wherein FDI up to 100% is allowed on
the automatic route in most of the sectors, except in:

 Activities that attract industrial licensing

 Proposals where foreign investors have existing ventures in India
 Proposals for acquisition of shares in an existing Indian company
by a non-resident investor
 Activities where automated route is not available
CONCLUSION:

The growth of economy was not

commendable before 1991, after implementing
LPG (Liberalization, Privatization &
Globalization) there is a tremendous growth in
Indian economy due to flow of foreign
investment and opportunities provided in India
to receive it.

According to me FDI plays a major role to

develop the Indian economy but to safe guard
the Indian SMEs the government can reframe
the FDI policies or the FDI can put its eyes on
technology transfer.