FOREIGN DIRECT

INTVESTMENT
PRESENTED BY:
ABID
BEAUTI
VICTORIA
ANILKUMAR
CONTENTS
Definition
Classification of Fdi
Benefits of Fdi
Disadvantages of Fdi
Determinants of Fdi
FDI policies
Strategies for foreign investor
Strategies for Indian investors
Data regarding current Fdi policy

DEFINITION
Investment is “the flow of funds one
destination to another”, for any activity,
including industrial development,
infrastructure and manufacturing.

It is the establishment of an enterprise by a
foreigner.

Its definition can be extended to include
investments
 made to acquire lasting interest in enterprises
operating outside of the economy of the
investor.
CLASSIFICATON OF FDI
 Broadly classified broadly classified into two types:
OUTWARD FDIS
 INWARD FDIS


 An outward-bound FDI is backed by the

government against all types of associated risks.

 Factors encourage inward FDIs include interest
loans, tax breaks, grants, subsidies, and the
removal of restrictions and limitations.
BENEFITS OF FDI
Capital
Technology
Market access
Increase in domestic investment
Export promotion
Generating employment
Infrastructure
Social effects
Spillover



DISADAVANTAGES OF FDI
Inconvenienced when negatively affected
The defense of a country has faced risks
Not appreciated by the workers of the recipient
country
A company may lose out on its ownership to an
overseas company
Governments of the host country are facing
problems with foreign direct investment
DETERMINANATS OF FDI
Growth prospects of the economy of the
country
Population of a country plays an important role
Human resources in a country
Inexpensive labor force
Infrastructural factors
Transparency of the legal frameworks
Dimensions of the host country
High per capita income
FDI POLICIES
 Two broad objectives
Ø to promote the investment opportunities to the
overseas investors
Ø strike a balance between the overseas and local
investors.


 SALIENT FEATURES
Ø Agriculture and plantations excluding tea
plantations
Ø Real estate business
Ø Retail trade in any form
Ø Security services

STRATIGIES FOR FOREIGN
INVESTORS TO INVEST IN INDIA
CONTD…
STRATEGIES FOR INDIAN
INVESTORS TO INVEST IN FOREIGN
STATISTICS
FDI COMPARISON
 SHARE OF TOP INVESTING
COUNTRIES FDI EQUITY INFLOWS
Ranks Country 2008 - 09 Cumulative % age with
( for April Inflows ( Apri total
2008 ) l 00 - April Inflows
09 )

1 MAURITIUS 5,183 115,556 44 . 26 %

( 1 , 295 ) ( 26 , 930 )

2 U.S.A. 799 20,757 ( 4 , 733 ) 7 . 95 %

( 200 )

3 SINGAPORE 1,653 19,778 7 . 58 %

( 413 ) ( 4 , 770 )

4 U.K. 190 19,254 ( 4 , 410 ) 7 . 38 %

( 48 )

5 NETHERLAN 18 11,939 4 . 57 %
DS (4) ( 2 , 709 )

6 JAPAN 59 9,395 3 . 60 %
( 15 ) ( 2 , 141 )

7 GERMANY 202 6,940 2 . 66 %

( 50 ) ( 1 , 594 )
STEPS TO ATTRACT FDI
 Political stability and a strong policy to protect
investors
 Safety and security
 Investment protection through legal provisions
 Proactive government policies
 Continuous infrastructural development
 Banking system with updated technology
 High productivity of the labour force
 Availability of raw material, components and
consumables
 Ample potential opportunities for products in the
neighboring countries.

THANK YOU