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Presentation on Foreign Direct Investment

(404)

Presented By: Submitted To:

Sachin Patil Mr. Anil Sharma

MBA II, NMU (40) .

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IMPACT OF FDI IN INDIAN ECONOMY

INTRODUCTION TO FDI:

Foreign Direct investment is theinvestment, which is made to serve the

business interests of the investor in a

company, which is in a different nation

distinction from the investors country of

the origin.

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TYPES OF FDI

05

BY

DIRECTION

INWARD

OUTWARD

BY

TARGET

GREENFIELD

INVESTMENT

HORIZONTAL FDI

VERTICAL FDI

BY

MOTIVE

RESOURCE

SEEKING

MARKET

SEEKING

EFFICIENCY

SEEKING

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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.

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INVESTOR

(HOME COUNTRY)

RECEIVER

(FOREIGN COUNTRY)

INVESTMENT OUTFLOW

RECEIVER

(HOME COUNTRY)

INVESTOR

(FOREIGN COUNTRY)

INVESTMENT INFLOW

02

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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

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ADVANTAGES OF FDI:

FDI develops the economy of both host andhome country.

FDI permits the technology transfers.

Employee enrichment in training andoperations.

It creates new jobs and advanced technology.

It pays an avenue to receive the funds in lowerrate of interests.

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DISADVANTAGES OF FDI:

There is a chance to spread the nationalsecrets.

The host country workers may dissatisfy with

the policies.

Problem in language and culture.

Size and condition of the market to theadvanced technology.

Government faces the problem to control the

operations of host country FDI.

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ROLE OF FDI ON INDIAN ECONOMY:

FDI plays a major role in Indian economy,FDI creates lot of new opening and hike inindividual salary because of it the life style getdeveloped so automatically the growth of theeconomy get leveraged.

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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

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CONCLUSION:

The growth of economy was notcommendable before 1991, after implementingLPG (Liberalization, Privatization &Globalization) there is a tremendous growth inIndian economy due to flow of foreigninvestment and opportunities provided in Indiato receive it.

According to me FDI plays a major role to

develop the Indian economy but to safe guardthe Indian SMEs the government can reframethe FDI policies or the FDI can put its eyes ontechnology transfer.

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