Managerial          economics-II          presentationTopic :-Foreign Direct      Investment(FDI)
Stewar   tBhavesh  Mo  nitKaveshna   Sor    ab    h Vika  s    Ari     fChai
Overview   of   the project
WHAT IS FDI ?   Foreign direct investment (FDI) in its classic form is    defined as a company from one country making a ...
WHY FDI?
Benefits                   Economic                    GrowthLinkages and spillover to                                  Tr...
LimitationsFluctuation in                                   Compromisingvalue of home             Inflation               ...
Investing in India –     Entry Routes Foreign Company has the following options to set up  business operations in India :
100% FDIPermitted In India
Arms and                             ammunition.            Housing and                                           Atomic  ...
Liberal,     largest   democracy,    political    stability India An    FDIDestination     Highest     rates of    return ...
Worlds fourth      largest    economy &  second largest  pharmaceutical     industryContd………..
Factors affecting                           FDIProfitability                Costs Of Production                           ...
Impact of FEMA on           FDI   As the third-largest economy India is a preferred destination for    foreign direct inv...
Contd……….     The future of Indian economy is brighter because of its huge    human resources, rapidly upcoming service s...
FDI policy in India   FDI is not allowed in the sectors of arms and    ammunitions, atomic energy, railway system,    ext...
IMPACT OF FDI IN                         INDIA of growth and    Enabled India to achieve a high degree    development.  ...
Sectors attracting highest FDI equity                   2%                               inflows                2%        ...
The Trends In FDI Inflow To India            Since 1991                                                                   ...
REGIONS NOT INDICATED               PATNA            GUWHATI              KANPUR       BHUBANESHWAR              BHOPAL   ...
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Managerial economics ii presentation

  1. 1. Managerial economics-II presentationTopic :-Foreign Direct Investment(FDI)
  2. 2. Stewar tBhavesh Mo nitKaveshna Sor ab h Vika s Ari fChai
  3. 3. Overview of the project
  4. 4. WHAT IS FDI ? Foreign direct investment (FDI) in its classic form is defined as a company from one country making a physical investment into building a factory in another country. Include investments made to acquire lasting interest in enterprises operating outside of the economy of the investor. They are usually non volatile in nature. Preferred over other forms of external finance because they are non debt creating. Their returns usually depends on the performance of the project.
  5. 5. WHY FDI?
  6. 6. Benefits Economic GrowthLinkages and spillover to Trade domestic firms Technology Employment diffusion and and skill knowledge levels transfer
  7. 7. LimitationsFluctuation in Compromisingvalue of home Inflation with currency soveigernity Greater Environment competition and natural for small and cost. infant industries
  8. 8. Investing in India – Entry Routes Foreign Company has the following options to set up business operations in India :
  9. 9. 100% FDIPermitted In India
  10. 10. Arms and ammunition. Housing and Atomic Real Estate Energy. Business Agriculturalor plantation FORBIDDEN Railway activities TERRITORIES Transport. Lottery Coal and Business lignite. Mining
  11. 11. Liberal, largest democracy, political stability India An FDIDestination Highest rates of return on investment
  12. 12. Worlds fourth largest economy & second largest pharmaceutical industryContd………..
  13. 13. Factors affecting FDIProfitability Costs Of Production Economic Conditions Government Policies Political Factors
  14. 14. Impact of FEMA on FDI As the third-largest economy India is a preferred destination for foreign direct investments (FDI). India’s recently liberalized FDI policy permits up to a 100% FDI stake in ventures. Industrial policy reforms have substantially reduced industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and FDI. During past few years number of changes was approved on the FDI policy to remove the cap in most of the sectors. Restrictions will be relaxed in sectors as diverse as civil aviation, construction development, industrial parks, commodity exchanges, petroleum and natural gas, credit-information services, Mining etc.
  15. 15. Contd………. The future of Indian economy is brighter because of its huge human resources, rapidly upcoming service sector, availability of large number of competent professionals, vast market for every product, increasing impact of consumerism, absence of controls and licenses, interest of foreign entrepreneurs in India and existence of four hundred million middle class people. Today, India provides highest returns on FDI than any other country in the world. Overall we can say that FEMA had a great influence on Economic growth of the country & it will remain for the coming years as well.
  16. 16. FDI policy in India FDI is not allowed in the sectors of arms and ammunitions, atomic energy, railway system, extraction of coal and lignite and mining industry In infra-structure development, FDI is allowed up to 100% equity participation, with the capping amount as Rs.1500 crores In finance sector, FDI is allowed up to 40% In telecom industry, FDI is allowed up to 49%
  17. 17. IMPACT OF FDI IN INDIA of growth and Enabled India to achieve a high degree development. A number of projects have been announced in areas such as electricity generation, distribution and transmission, as well as the development of roads and highways, with opportunities for foreign investors. The Indian national government also provided permission to FDIs to provide up to 100% of the financing required for the construction of bridges and tunnels, but with a limit on foreign equity of INR 1,500 crores, approximately $352.5m.
  18. 18. Sectors attracting highest FDI equity 2% inflows 2% SERVICES SECTOR 3% COMPUTER SOFTWARE& 4% HARDWARE 21% TELE- COMMUNICATIONS4% HOUSING & REAL ESTATES CONSTRUCTION ACTIVITIES7% POWER AUTOMOBILE INDUSTRY* 9% METALLURGICAL INDUSTRIES 8% PETROLEUM & NATURAL GAS 8% CHEMICALS
  19. 19. The Trends In FDI Inflow To India Since 1991 27329 25609 24573 15725 5975 5772 4222165 393 654 1374 2141 2770 3682 3083 2439 2908 3134 2634 3754 US $
  20. 20. REGIONS NOT INDICATED PATNA GUWHATI KANPUR BHUBANESHWAR BHOPAL COCHI Regional disparities JAIPUR PANAJI in FDI equity inflows CHANDIGARGH KOLKATTA HYDERABAD CHENNAI AHEMADABAD BANGLORE NEW DELHI MUMBAI 0% 5% 10% 15% 20% 25% 30% 35%
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