FOREIGN DIRECT

INVESTMENT
Foreign Direct Investment is any form of investment
that earns interest in enterprises which function
outside of the domestic territory of the investor
 FDI STOCKS NOW CONSTITUTE 28%
GLOBAL GDP
 Foreign Direct Investment, or FDI, is
a type of investment that involves
the injection of foreign funds into an
enterprise that operates in a
different country of origin from the
investor.
Advantages of FDI
 Economic development of the host
 Transfer of technology
 Development of human capital resources
 Creation of jobs
 Opening export window
 FDI shifts the burden of risk of
investment
 Repayments are linked to profitability
Disadvantages of FDI
 Company might lose ownership
 Differences in Language and Culture
 Country secrets may be disclosed
 Policies adapted may not be appreciated
FDI IS PROHIBITED IN THE
FOLLOWING CASES
 Gambling and Betting
 Lottery Business
 Retail Trading(Except single brand retail
trading)
 Atomic Energy
 Agriculture with certain exceptions
Routes of FDI
 Automatic Route: Listed Activities within
sectoral caps
 FIPB route: Investment proposals falling
outside the automatic route.
 CCFI Route: Investment proposal falling
outside the automatic route and the
project cost of Rs 6000 million and more
 As investors search the globe for the highest returns, they
are often drawn to places endowed with bountiful natural
resources but are handicapped by weak or ineffective
environmental laws. Many people and communities are
harmed as the environment that sustains them is damaged
or destroyed -- villages are displaced by the large
construction projects, for example, and indigenous people
watch their homelands disappear as timber companies
level old-growth forests. Foreign investment-fed growth also
promotes western-style consumerism, boosting car
ownership, paper use, and Big Mac consumption rates
towards the untenable levels found in the United States --
with grave potential consequences for the health of the
natural world, and the stability of the earth’s climate, and
the security of food supplies.”