FDI-Foreign Direct Investment
Foreign direct investments are defined as the direct investment from any foreign company in any of the country's productive assets. India FID includes investments from abroad in various projects
like infrastructure development projects including for the construction of bridges, flyovers, commercial complexes and even in residential projects. FDI is also allowed in finance sector like banking,
insurance and even in real estate development etc.
FDI-Foreign Direct Investment
In India both in flow and out flow FDI is considered. While preparing a report on FDI and economic growth, FDI (foreign direct investments) and FII (foreign institutional investors) are considered
separately. In terms of both FDI flows in India and outflow from India FDI and FII in India have registered a positive growth.
FDI Policy in India
The FDI tariffs and strategies are influenced by the norms and policies followed in India. As per the FDI theory of the government of India certain rules and regulations are imposed on foreign
direct investments that also include FDI limits in India.
In India 100% equity participation is allowed in mining industry with capital amounting to 1500 crores. Excluding arms and ammunitions, atomic energy sector, railways system.
In finance sector, FDI contribution in banking sector cannot exceed more than 40% including the credit card operation and in insurance sector, only joint ventures with local insurance
companies is allowed.
In telecom industries FDI maximum is 49% especially in GSM services.
FDI Advantages and Disadvantages
GOI (government of India) regulate the rule and regulation regarding the FDI in real estate sector as well as retail sector after a detail study of pros and cons in FDI. The advantage of FDI is that
equity participation of foreign brings larger and stronger infrastructural base along with high level technology but the disadvantage is that the ownership rights will be lost to a foreign investor.
The disadvantage about the FDI includes the raise of inflationary conditions caused by the excess floe of FDI towards India. In order to discourage flow of FDI towards India, GOI has devalued
rupee. However FDI involves the benefits such as efficient management and improvement of the quality and standard of the product.
Certain regulations on FDI stocks as per FDI policy 2007 may discourage FDI confidence by shutting the doors of industrial relation ships with foreign investors. FDI and GDP are working together
leading to an economic development in India.
Foreign Portfolio Investment in India
Foreign portfolio investment (FIP) is another form of foreign investment other than FDI. FPI is more simply traded form of foreign investment. In FPI investments are made through stocks and
bonds with a foreign enterprise for a short term financial relationship plans.
FDI Trends in India
Government has taken many steps to improve the database of FDI. FDI and trade go hand in hand as both are in a similar situation. From FDI the major economic problem unemployment is
reducing as the investment has improved the infrastructure and the growth is demanding for more workers. The foreign direct investments notations being adopted by India, the FDI strategies,
and the guidelines regulating the inflow of foreign funds in India are shown in foreign direct investment news in india.
This is a very subjective question. It will depend on the country that is being invested in, the industry where the investment is being made, the firm that is making
theinvestment and amount of investment that is being made.
The pros of foreign direct investment are the flow of cash into the country. It will obviously stimulate economic activity in the country. Employment numbers will go
up. Existing domestic producers will have to pull up their socks due to the onset of high quality competition. The international community will sit up and take notice.
The Government will be taken seriously in the international summits because the number of stakeholders in the country has increased.
The cons of foreign direct investment are most visible in cases where the industry could have national secrets. The defense sector could be at risk if it allows FDI.
Foreign policies may be enforced that do not go down well with domestic employees.
