fdi

Foreign Direct Investment : 

Foreign Direct Investment Smita

Reasons for FDI as seen by an MNC : 

Reasons for FDI as seen by an MNC Opportunity to lower down transportation cost. Domestic competition. Extension of Product life cycle. Market Opportunity. Locational Advantages.

Advantages of FDI to HOST Country. : 

Advantages of FDI to HOST Country. FDI bridges the gap between domestic savings and demand for resources for investment. FDI also provides managerial, technical, and administrative expertise to local enterprises. FDI encourages local enterprises to set up supporting industries. FDI increases the GDP of the country and generates employment opportunities. FDI encourages competition. FDI results in creation of better goods and services at lower prices for the consumers. FDI creates revenue for the government.

FDI Trends : 

FDI Trends USA largest recipient as well as source of FDI. China largest recipients of FDI in Asia. China receives more than 80% of the funds coming in as FDI to Asia. FDI in China is more than 40 billion USD per annum. India receives only 1/10th of the value of funds coming to China.

Indian Experience : FDI : 

Indian Experience : FDI In 1991 India opened its economy. It allowed level playing field to foreign players in number of sectors. Floating exchange rate system was adopted. Rupee made fully convertible in current account Tax rate applicable on Foreign companies have come down progressively. The FDI limits in number of sectors have been progressively increased. FDI investments and returns can now be easily repatriated. FDI up to 100% allowed in number of sectors except for in Media, Banking, Aviation, Insurance, Retail

Recent Policy Initiatives : 

Recent Policy Initiatives FDI in Aviation increased from 40% to 49%. FDI up to 100% permitted in Infrastructure, development of Townships, Other Construction projects. FDI limit in telecom increased to 74%. FDI in exploration and mining of Coal, Lignite permitted up to 74%. FDI up to 20% allowed in FM Broadcasting. 100% FDI permitted in tea plantations, Modernization of Airports, Ports and Courier services

India Competitive Edge : 

India Competitive Edge Highly Skilled Manpower available for certain sectors like Banking, Pharmaceutical sector, IT and ITES etc. Rapidly increasing size of middle class in India. Creation of new SEZ. Growing economy with sound democratic institutions.

Reasons for low FDI in India : 

Reasons for low FDI in India Tight bureaucratic control and delays in clearance of FDI proposals. Corruption. Rigid Labor laws especially Contract Labor laws Political Hostility of Left Parties. Poor infrastructure. Exit policies not clear.

WHY CHINA? : 

WHY CHINA? Huge Consuming Market with greater Per Capita Income. Good Infrastructure. Existence of Special Economic Zones. Quick Clearance of FDI Proposals. Low labor cost and suitable Labor laws. Single Political direction and stable economic policies

FDI Trends ( World Investment Report-06) : 

FDI Trends ( World Investment Report-06)

FDI Trends : 

FDI Trends FDI TRENDS.htm