TRENDS REGARDING THE FOREIGN DIRECT INVESTMENT PRE-REFORMS AND POST-REFORMS

1. Foreign Direct
Investment
Group member:
Tripti Yadav 55
Himashi Verma 56
Ashwin menon 57
Riya Gupta 82
Hitesh Basene 85

2. WHAT IS FDI
 Investment in the another country
 Ownership and control
 Cross- border investment
 Expansion of operations

3. Methods of FDI
 Greenfield investment
 Mergers and acquisitions

4. Types of FDI
 Vertical
 Horizontal
 conglomerate

5. Various routes
 Automatic route
 Government approval

6. Benefits of FDI/ Impacts
 Foreign exchange position
 Employment generation
 Production quality and technology upgradation
 Capital formation
 Exports
 Tax revenues for the government

7. Determinants of FDI
 Wage rate
 Skilled labour
 Transport facilities
 Infrastructure
 Political stability
 Access to free trade zones/areas

8. Current scenario
 100% FDI for Single Brand Retail Trading (SBRT) under automatic route.
 100% FDI under automatic route in Construction Development.
 Foreign airlines allowed investing up to 49% in Air India under government
approval route.
 Communications has toppled manufacturing and become the biggest FDI
magnet.

9. NEED FOR FDI
MACRO-ECONOMIC INDICATOR 1989-1990(in
crores)
1990-1991(in
crores)
1. Trade deficit 12,400 16,900
2. Current account deficit 11,350 17,350
3. Inflation rate 7.5% 13%
4. GDP growth rate 6.5% 5.5%
5. Foreign exchange reserves (5277) (3300)
SOURCE:RBI

10. FDI pre-reforms
0
500
1000
1500
2000
2500
3000
3500
1981 1982 1983 1984 1985 1986 1987 1988 1989 1990
TREND PRE-REFORMS
FDI AMOUNT

11. FDI post-reforms
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
TREND POST-REFORMS
AMOUNT

12. SECTORAL ANALYSIS
 FDI attracting Sectors -
 Communication Services - At USD 8809 million.
 Manufacturing - At USD 7066 million.
 Retail and Wholesale trade – At USD 4478 million.
 FDI not being flown into –
 Mining
 Trading
 Restaurants and Hotels industry
 Education

13. Conclusion
 FDI has been increasing since reforms
 Significant contribution to the economic development
 Liberal laws
 FDI and FPI

14. Recommendation:
 Open up export oriented sectors
 Political stability with Investment protection
 Adopt innovative and globally competitive policies
 Impact/other variables
 Comparison to international perspectives

15. THANKYOU