INTRODUCTION Long term participation by a country into another countrythrough participation in management , joint venture ,transfer of technology and expertise It is a measure of foreign ownership of productive assets like factories and land &mines Increasing foreign direct investment can be used as one measure of economic globalisation Despite providing foreign funds and capitals ;it has also been generating employment opportunities
SECTORS OF F.D.I IN INDIA 100% F.D.I is permissible in hotel and tourism industry Hotel industry includes restaurants, beach resorts, accommodation and other food facilities to tourists Tourism industry includes travel agencies, tourist transport agencies, units providing facilities for culture ,adventure and wild life to tourists Medical tourism, in India, has emerged as a huge money generator India has been promoting its medical tourism to provide healthcare facilities to tourists that has estimated to reach US$2 billion by 2012
continued Up to 100% F.D.I is allowed in projects related to electricity generation, transmission , and distribution other than atomic reactor power plants F.D.I up to 100% is permitted in the manufacturing of drugs and pharmaceutical provided it does not involves recombinant D.N.A technology F.D.I up to 100% is permitted in projects of construction and maintenance of roads highways, vehicular bridges, toll roads, tunnels, ports and harbors.
continued F.D.I up to 26% is permitted in insurance sector provided adherence to guidelines of INSURANCE REGULATORY & DEVELOPMENT AUTHORITY For trading companies 100% F.D.I is allowed for exports ,bulk imports and carry wholesale trading F.D.I up to 49% is allowed in banking sector provided adherence to guidelines of Reserve Bank of India For basic ,cellular ,value added services and mobile personal communication by satellite, 49% F.D.I is allowed.
F.D.I IN EDUCATION Under this foreign universities are allowed to set-up their infrastructure and provide faculties of international standards F.D.I in education would prevent going of Indian students to foreign countries for higher education It would encourage competition with domestic universities . Hence domestic universities would make efforts to match the level of foreign universities
POLICIES FOR FDI IN INDIA AUTOMATIC ROUTE It does not require any prior approval either by government or reserve bank of India. The investors are only required regional office concerned of RBI within 30 days of receipt of inward remittances and submit the document within 30 days of issue of shares of foreign investor
GOVERNMENT APPROVAL Approval of activities that are not under automatic route It requires approval of FOREIGN INVESTMENT PROMOTION BOARD PROHIBITION SECTORS It includes gambling ,betting , atomic energy , agriculture and lottery business etc OTHER POLICIES ARE: Industrial licensing, general permission of R.B.I , small scale sector, locational restrictions and environmental clearence
WHY INDIA? India is world’s largest liberal democracy with sufficient natural resources India has got skilled labor force In India the rate of return on investment is high Second largest group of software developer World’s fourth largest economy and second largest pharmaceutical industry India has been growing with 8% gross domestic product
CONTINUED India has got an international stand to become the next permanent member to United Nation’s Security council India is an important member of SAARC , WTO, SAFTA and G-20
ADVANTAGES Attracting foreign direct investment has become an integral part of the economic development strategies for India It has opened a wide spectrum of opportunities in the trading of goods and services in India both in terms of import and export It has also generated employment opportunities through setting up of industrial units in all corner s of country It has also promoted introduction of modern advance technology F.D.I in education has improved standard of education
DISADVANTAGES Foreign companies usually have ability to dominate the market ; thus monopoly of foreign companies may occur Government ,sometimes ,in order to promote funds inflow ,may give some undue advantage to foreign companies Foreign companies makes difference between rural and urban India as they create products for small number of higher class of people In education sector foreign universities won’t be able to form trust under Indian law which is the first to buy land to start an institution
FUTURE PROSPECTS Though due to global recession foreign investors are looking a bit gloomy but its future is bright Government is planning to increase the participation of F.D.I in construction business F.D.I in education is in focus. Hence some European an british universities are showing keen interest Recently the biggest Foreign Direct Investment worth Rs55000 crore has been made with POSCO i.e Pohang Steel Company of south korea
CONCLUSION Considering foreign direct investment as an important measure of a country’s economic growth and development through introduction of foreign advance technology which is beneficial for both consumer and seller ,it must be promoted . As it is generating employment opportunities it is dealing with one of the most important issue of our country and in education sector providing international standard of education within the country , it is certainly a WIN-WIN situation for us