GROUP MEMBERS:

NADIR BABA PRAVEEN RAUTELA MOHSIN KHAN ASAD QURESHI

INTRODUCTION
DEFINITION HISTORY TYPES OF FDI STRATEGIC LOGIC BEHIND FDI

FACTORS AFFECTION FDI

Foreign Direct Investment in India

FDI Policy in India

MAIN SECTORS WITH FDI EQUITY/ROUTE LIMIT IN INDIA

100% FDI PERMITTED IN INDIA PROS & CONS OF FDI

CONCLUSION

 The

simplest explanation of FDI would be a direct investment by a corporation in a commercial venture in another country. key to separating this action from involvement in other ventures in a foreign country is that the business enterprise operates completely outside the economy of the corporations home country.

 Foreign

direct investment is that investment, which is made to serve the business interests of the investor in a company, which is in a different nation distinct from the investor's country of origin.
parent business enterprise and its foreign affiliate are the two sides of the FDI relationship. Together they comprise an MNC.

 In

the years after the Second World War global FDI was dominated by the United States.
US accounted for around three-quarters of new FDI between 1945 and 1960.

The

Since

that time FDI has spread to become a truly global phenomenon, no longer the exclusive preserve of OECD countries.

FDIs can be broadly classified into two types:

Outward Inward

FDI

FDI

Other categorizations of FDI :

Horizontal Vertical

FDI

FDI

 Access Access Access Access

to factors of production

to products
to customers to markets for domestic industry

Protection

 Profitability:

Economic

Conditions:

Government

policies:

Political

factors:

 The

economy of India is the third largest in the world as measured by purchasing power parity (PPP). measured in USD exchange-rate terms, it is the tenth largest in the world, with a GDP of US $800.8 billion (2006). is the second fastest growing major economy in the world.
is a major exporter of highly-skilled workers in software and financial services, and software engineering.

When

India

 FDI

policy is reviewed on an ongoing basis and measures for its further liberalization are taken. Policy permits FDI up to 100 % from foreign/NRI investor without prior approval in most of the sectors including the services sector under automatic route.

FDI

FDI equity limitAutomatic route

->Insurance 26%

FDI requiring prior approval

->Defense production 26% ->FM Broadcasting - 20%

->Domestic airlines 49%

->News & current affair- 26% ->Telecom services, Foreign equity 74% ->Private sector banks- 74% ->Mining of diamonds and precious stones- 74% ->Exploration and mining of coal and lignite for captive consumption- 74% ->Broadcasting- cable, up-linking 49%

->Trading- wholesale cash and carry, export trading, etc., 100%

->Tea plantation 100% Development of airports- 100%

->Courier services- 100%

Engineering & Manufacturing sectors

Roads & Highways, Ports and Harbors Industrial model towns/industrial parks

Hotels & Tourism

Pollution Control and Management Advertising & Film industry Power generation (hydro-electric, coal/lignite, oil or gas based)

Information Technology including E-Commerce

PROS:

FDI is good for growth of economy. It generates employment for the country. It increases standard living of the people. Investment in a particular region leads to regional development. The gap of regional disparity can be minimized. New MNC comes with new Technology.

CONS:

Profit of MNC will go outside the India. Balance of payment can be unfavorable for India. The Government should control on much investment. Government must safeguard the interest of Indian economy.

A large number of changes that were introduced in the countrys regulatory economic policies heralded the liberalization era of the FDI policy regime in India and brought about a structural breakthrough in the volume of the FDI inflows into the economy maintained a fluctuating and unsteady trend during the study period.