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Foreign Direct InvestmentNeed of the hour

Presented by:
Ashita Rastogi (069)
Kanika Garg
(074)
Shalini Dagar (102)
Sheenu Khosla (105)
Shreya Gupta (107)
Deepali Sharma (122)

Contents
Introduction
Foreign

Direct Investment in India


Restricted list
Types of FDI
Recent Developments
Current Challenges
Trends of FDI in India
Advantages and Disadvantages of FDI
Case Study
Conclusion

INTRODUCTION
A Foreign

Direct Investment (FDI) is a controlling


ownership in a business enterprise in one country by an
entity based in another country.

FDI

involves changes in ownership of domestic assets of


a company. Investment by General Motors in India implies
ownership of domestic firms by the non-resident. On the
other hand investment by Tata Motors abroad implies
ownership of foreign firms by the residents of our country.
Investment by the non-residents in our country causes the
inflow of financial capital and it is therefore recorded as a
credit item in the capital account.

What attracts FDI


Attractive

investment climate
Consistency
and
predictability
macroeconomic policies
Good Governance
Economic Stability
Guarantee of property rights
Rule of law and absence of corruption

in

Restricted list of Sectors


The extant policy does not permit FDI in the following cases:
1. Gambling and betting
2. Lottery Business
3. Atomic Energy
4. Retail trading (except Single Branded product retailing)
5. Business of Chit Fund
6. Plantations (However, FDI is allowed in Tea Plantation,
Floriculture, Horticulture, of Seeds, Animal Husbandry,
Pisciculture and Cultivation of Vegetables, Mushrooms
etc. under controlled conditions and allowed in services
related to agro and allied sectors)
7. Trading in Transferable Development Rights (TDRs)
and any activity/ sector that is not opened to private sector
investment.

TYPES OF FDI
Greenfield

Investment
Mergers & Acquisitions
Horizontal Foreign Direct Investment
Vertical Foreign Direct Investment

Recent policy initiatives


The

Ministry of Home Affairs has given the approval


to the proposal of allowing FDI in railways.
The Andhra Pradesh State Investment Promotion
Board has given the approval to six major investment
proposals of Rs 6, 500 crore in total.
The Indian government allowed 100 % FDI under
automatic route in storage and warehousing including
warehousing
of
agriculture
products
with
refrigeration.
Increased Japanese investment in the country.

Sources of FDI in India


Recent Developments in FDI in India

Luxury

watch brand Jaeger-LeCoultre


Switzerland to enter the Indian retail market.

from

New

Zealand is looking to establish an office in


Mumbai to broaden its education footprint in India.

Frances

Lactalis will buy out Hyderabad-based


Tirumala Milk Products.

India

and UAE have agreed


collaboration in renewable energy.

to

promote

Current Challenges and


Improvement Areas
Resource
Equity

Challenge

Challenge

Political

Challenge

Federal

Challenge

TRENDS AND PATTERNS OF


FDI FLOW IN INDIA
Economic

reforms taken by Indian government


in 1991 makes the country as one of
the prominent performer of global economies
by placing the country as the 4th largest and
the 2nd fastest growing economy in the world.
India also ranks as the 11th largest economy
in terms of industrial output and has the 3rd
largest
pool
of
scientific
and
technical manpower.

Cont.

The

IT industry is one of the booming sectors in


India. At present India is the leading
country pertaining to the IT industry in the Asia
-Pacific region. With more international companies
entering the industry, the Foreign Direct Investments
in India has been phenomenon over the year.
The rapid development of the telecommunication
sector was due to the FDI inflows in form of
international players entering the market and transfer
of advanced technologies. The telecom industry is
one of the fastest growing industries in India. With a
growth rate of 45%, Indian telecom industry has the
highest growth rate in the world.

CASE STUDY ON COCA COLA

CONCLUSION
FDI

is definitely the need of the hour as large


inflows of foreign investment are needed for
the county to achieve a sustainable high
trajectory of economic growth. Specially for a
developing nation like India FDI plays an
important role as it leads to improved
consumer
welfare,
more
employment
generation and also inflow of more
equipment and technology.

Thank you for listening


so patiently