Gola Ram Kali, Dharwal Mridul, Agarwal Ankur, “Role of Foreign Direct Investment in the Development of Indian Economy”
KHAN IRAM, “IMPACT OF FOREIGN “DIRECT INVESTMENT (FDI) ON INDIAN ECONOMY: A SECTORAL ANALYSIS”
Ramanaih Venkata M. “FOREIGN INSTITUTIONAL INVESTORS AND INDIAN STOCK MARKET”
Iqbal Zafar, Masood Imran, Ramzan m., “Foreign Direct Investment and Economic Growth:: Comparative Position off Chinese and Indian Economies”
United Nations Conference on Trade and Development (UNCTAD)
Gross Domestic Product (GDP)
Impact of Foreign Direct Investment on indian economy
Impact of FDI on Indian Economy
1st Year, Symbiosis Law School, Noida
F. D. I.???....
• Foreign source I.e. from outside the country
• Direct Investment
• Into Production or Manufacturing or any Business
• By an individual or a company or a firm
• By way of buying a whole existing company or a part
of it or by expanding business operations of an
FDI in India
• Introduced in 1991
• Under FERA act (now FEMA i.e. Foreign Exchange
Management Act 42 of 1999)
• According to the latest policy by cabinet 51% FDI in multi
brand retail is allowed
• 100% is the cap in single brand retail
• Not allowed in the sectors like arms & ammunition, atomic
energy, Railway, Minerals (Coal, Iron, Manganese etc.)
• Secondary Research to study
the FDI in India as to know the growth and development of
the impact of FDI in India in terms of GDP, EXPORT, cash
To establish a relationship between FDI and the economic
growth in India
• Kali Ram Gola, Mridul Dharwal, Ankur Agarwal have
with the increasing trend of globalization the essentiality
of FDI in economic development has remained
the spirit in which the economy has been liberalized and
exposed to the world economy at the late eighties and
early nineties has not been achieved after so many years.
this calls for a judicious policy decision towards FDI at
the sartorial level.
• Iram Khan has highlighted that
India is a desired investment destination all over the globe.
The impact of FDI on India has been calculated taking the
GDP of India in account. The overall positive effect of GDP on
Indian economy has been acknowledged.
Although the there has been positive impact of FDI on overall
growth of the economy and India has registered tremendous
growth in FDI inflows during last decade and total inflows
crossed the level of US$ 30 million, when it is compared with
other countries and continents the figure of FDI inflows are
• M. Venkata Ramanaiah has discussed
the effects of FDI on Indian economy in post liberalization
The growth of gross domestic product (GDP) in the last two
quarters of 2006 was in the range of 8.5 – 9.2 per cent. In
this, service sector accounted for a greater part.
FDI not only facilitates the inflow of funds but also
transferring the technology, innovative management and
Helps expand host country market and foreign trade.
• Zafar Iqbal, Imran Masood, M. Ramzan, have done a
comparative analysis of the Indian and Chinese conditions.
China has a better infrastructure, better economic activities
and favorable business environment.
However India has better political and legal systems.
They preferred democracy to communism for FDI. In other
words according to them mixed economy is more preferable
than socialist economy.
India has a fair chance to attract FDIs.
Current Stats and Facts
• Started from a baseline of less than $ 1 Billion in 1990
• Second most desired FDI destination. Next to only China
(2010-2012 UNCTAD survey)
• Sectors attracting higher inflows
Computer software hardware
• Leading sources are
• FDI flow $ 10.4 Billions (UNCTAD data)
• Inflows during last decade and total inflows more than $ 30 Millions
• Not encouraging when compared to the inflow figures of other countries
Effect on Indian GDP (comparison with
• In India every 1% rise in FDI results in 0.02% growth in
• In China every 1% rise in FDI results in 0.07% growth in
• Although the impact of FDI on Indian GDP is significant,
however it is less than the global trend and significantly
falls short from the expectations.
• Biggest competitor China is doing well owing to the
reasons mentioned by Zafar Iqbal Imran Masood and M
Potential positive effects
• boost efforts for the development in many ways, for
instance boosting export,
• creating new employment opportunities,
• increasing technological capabilities and
• increasing total financial resources
• Hence contributing to overall development of the
economy of the country.