A presentation on the advantages and disadvantages of FDI instrument and the latest FDI inflow trend in India.

1. FOREIGN
DIRECT
INVESTMENT
Ambika Dixit – 19/FMS/MBA/012
Ashish Pansari – 19/FMS/MBA/078
Mayank Garg – 19/FMS/MBA/018
Mayank Jain – 19/FMS/MBA/087
Rajat Mangla – 19/FMS/MBA/098

2. DEFINITION OF FDI
A foreign direct investment (FDI) is an investment made by a firm or
individual in one country into business interests located in another
country. Generally, FDI takes place when an investor establishes foreign
business operations or acquires foreign business assets in a foreign
company. However, FDIs are distinguished from portfolio investments
in which an investor merely purchases equities of foreign-based
companies.
- investopedia.com

3. Foreign Direct
Investment
Direction of
Investment
Inward FDI
Outward FDI
Entry Mode
Greenfield
Brownfield
Sector
Industrial
Non Industrial
Target
Vertical
Horizontal
TYPES OF FDI

4.  Inflow of equipment and technology
 Employment Generation
 Improved customer welfare
 Integration into Global Economy
Knowledge and resource transfer
PROS OF FDI

5.  Competition for small and local industries
 Conflicts of Laws
 Loss of Control
 Effect on domestic culture
CONS OF FDI

6. ENTRY ROUTES OF FDI
AUTOMATIC
ROUTE
GOVERNMENT
APPROVAL
SHARE
ACQUISITION
NEW INVESTMENT
VIA EXISTING
COLLABORATOR
GENERAL
PERMISSION OF
RBI UNDER FEMA
INTERNATIONAL
FINANCIAL
INSTITUTIONS

7. 4.22
2.79
2.24
1.13
Telecommunication
Service Sector
Computer Sofware and Hardware
Trading
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Top 4 FDI Equity Industry for Q1 2019 (in Billion USD)
FDI Equity (in Billion USD)
TRENDS OF FDI

8. 9158
6415
4462
2623
Service Sector
Computer Sofware and Hardware
Trading
Automobile Industry
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Top 4 Sectors Attracting FDI for 2018-19 (in Million USD)
FDI Equity (in USD Millions)
TRENDS OF FDI

9. 16228
8084
3870
3139
2965
Singapore
Mauritius
Netherlands
USA
Japan
0 2000 4000 6000 8000 10000 12000 14000 16000 18000
Top 5 Countries with Highest Share in 2018-19 (in Billion USD)
FDI Equity (in USD Millions)
TRENDS OF FDI

10. 5.33
4.67
1.35
1.45
0.47
Singapore
Mauritius
Netherlands
USA
Japan
0 1 2 3 4 5 6
Top 5 Countries with Highest Share in Q1 2019 (in Billion USD)
FDI Equity (in USD Billions)
TRENDS OF FDI

11.  In August 2019, government permitted 100% FDI under automatic route in
coal mining. Similar case in Insurance Intermediaries.
In Union Budget 2019-2020, the government of India proposed opening of
FDI in Aviation, Media (Animation, AVGC)
In February 2019, the Government of India released the Draft National E-
Commerce Policy which encourages FDI in the marketplace model of e-
commerce. Further, it states that the FDI policy for e-commerce sector has
been developed to ensure a level playing field for all participants.
No government approval will be required for FDI up to an extent of 100 per
cent in Real Estate Broking Services.
 Foreign airline can now invest up to 49% in Air India with Government
Approval
RECENT DEVELOPMENT IN FDI SCHEMES

12. Foreign Direct Investment in India has increased in past few
years due to recent efforts put forth by Government of India to
reduce the restrictions on Investment in sectors like coal
mining, telecommunication, insurance, etc. and as per the
survey conducted by Emerging Market Private Equity
Association (EMPEA), India has potential to become the most
attractive market for global partners by October 2020. This
has been made possible due to more attractive and investor
friendly FDI schemes launched recently.
CONCLUSION

13. • www.india-briefing.com/news/fdi-india-performance-overview-fy-
2019-18677.html/
• dipp.gov.in/sites/default/files/FDI_Factsheet_27May2019.pdf
• Wikipedia.org
• slideshare.net
• nber.org
• corporatefinanceinstitute.com
BIBLIOGRAPHY

14. THANK