Foreign direct investment (FDI) involves investment from another country into a business operating in a different country. There are two main types of FDI: greenfield investment which establishes new operations, and acquisitions or mergers with existing foreign firms. Major sources of FDI historically include the US, UK, Netherlands, France and Germany. FDI provides benefits like job creation, technology transfer, and improved balance of payments, but can also threaten small local industries and increase competition. India saw a large rise in FDI after economic liberalization in 1991, with FDI now generating over 1 crore jobs and India becoming a top destination for global investment. Major sectors receiving FDI in India include infrastructure like railways, automotive,

1. FOREIGN DIRECT
INVESTMENT

2. Introduction:
Foreign Direct Investment, or FDI
is a type of investment that involves injection
of foreign fund into an enterprise that operates
in a different country of origin from investor in
a different country of origin from investor.

3. FDI can be:
• Greenfield investment: To establishment new
operation in a foreign country.
( sales office, manufacturing facility, etc )
• Acquisition or merger: With existence firm in
the foreign country.
Source of FDI:
• Since world war-II US has been the largest
source country for FDI
• UK, Netherlands, France, Germany, and japan
are other sources country.

4. Reasons for Foreign Direct Investment:
• For Cheap production
• Transportation Cost
• Labour cost
• Size of market

5. Advantages of FDI:
• Employment Generation
• Technology Transfer
• Improvement of Balance of payment

6. Disadvantages:
• Treat to small scale industry
• Competition
• Exploitation of resources

7. CURRENT SCENARIO
• Economic liberalization started in India in 1991
during economic crisis and since then FDI has
steadily increased in India.
• It generates more than 1 cr. jobs.
• FDI inflow increases by 48% since launch of ‘Make
in India’ initiative
• India was ranked 15 in the world in terms of inflow
in 2013, it rose up to 9th position in 2014.
• In 2015 India become the first top destination for
foreign direct investment.

8. MAJOR SECTORS FOR FDI
Infrastructure
• 10% of India’s GDP is based on construction
activities.
• Indian government has invested $1 trillion on
infrastructure.
Railways
• 100% FDI is allowed in most of the areas of
Railways.
• In Mumbai-Ahemdabad high speed corridor
project Foreign investment more than 90000 cr is
expected.

9. AUTOMOTIVE:
• India is the seventh largest producer of vehicles in the
world with 25.5 million vehicles.
• Automobiles shares 7% of the India’s GDP.
PHARMACUTICAL:
• Indian pharmaceutical market is 3rd largest in terms of volume
and 13th largest in terms of value.
• 74% FDI is permitted in Pharmaceuticals.