As per the latest World Investment Report 2019

1. FDI Prospects
Swapnil Shukla
Vinod Sharma
Manpreet Singh
Yashi Kesharwani
Yash Khanna
Shalini Raichandani

2. OBJECTIVES
The Objective of the Project report
is to analyze
 The FDI Flows in India
 Why FDI has shown a decline in
past years?
 Reasons for Projections of Increase
in FDI
• Short Term Prospects
• Long Term Trends
• IPA’s Expectation

3. FDI FLOWS TO
INDIA AND ITS
TRENDS
The World Investment Report 2019 shows global FDI
flows slid by 13% in 2018 to $1.3 trillion from $1.5
trillion – the third consecutive annual decline.
India slipped to 10th place in the latest ranking of top
FDI receiving countries in 2018 according to World
Investment Report of UNCTAD
Growth in cross border M&As to $33 billion in 2018
from $23billion in 2017 due to transactions in retail
trade, which includes e-commerce and
telecommunication.
Singapore was the largest source of FDI in India in
April-June 2019-2020 period with $5.33 billion
investments followed by Mauritius worth $4.67 billion,
the US worth $1.45 billion, the Netherlands worth
$1.35 billion and Japan worth $472 million.

4. FDI Flows to India – Country wise and Industry wise Report
by RBI

5.  India has become the most attractive emerging market for global partners (GP)
investment for the coming 12 months, as per a recent market attractiveness survey
conducted by Emerging Market Private Equity Association (EMPEA).
 Annual FDI inflows in the country are expected to rise to US$ 75 billion over the next
five years, as per a report by UBS.
 The Government of India is aiming to achieve US$ 100 billion worth of FDI inflows in
the next two years.
 The World Bank has stated that private investments in India is expected to grow by
8.8 per cent in FY 2018-19 to overtake private consumption growth of 7.4 per cent,
and thereby drive the growth in India's gross domestic product (GDP) in FY 2018-19.

6. The Indian government’s favorable policy regime and robust business environment have ensured that
foreign capital keeps flowing into the country.
Following are the short and long term factors influencing the FDI of India:
 Geopolitical risk
 Inflation rate
 Protectionist policies
 Green field
 Cross border M&A
 Trade Tension
 Policy Factors
 Economic Factors
 Business Factors
 Megadeals
 Volatile Financial Flows

7. Geopolitical Risk
 Geopolitical risks are being ignored in India
 Demonetization (of high-value Indian currencies) has had a tangible
impact on equity markets.
https://www.livemint.com/Money/Y9UmVZDaHQ8ybL6HT1ebZI/Geopolitical-risks-are-being-ignored-in-India-Ambit-
Capital.html

8. Protectionist Policies
 India is one of world's most protectionist countries
 Make in India is one of the most successful protectionist policy
 FDI in India has followed a positive trend since the launch of Make In India.
 FDI inflow from April 2014 to March 2019 (US$ 286 Billion) is 46.94% of the
overall FDI received in the country since April 2000.
 For the first time, India cross the US Dollar 60 Billion mark in financial year
2017-18 with US $55.55 Billion in FDI, due to investment friendly policies and
opening of FDI allowances in various sectors.
https://www.bbc.com/news/business-47857583

9. Greenfield
 It occurs when a parent company & government begins a new venture by
constructing new facilities in a country outside where a firm is head quatered
 Between 2005-2016, India remained the top recipient of greenfield FDI from
the Commonwealth, more than doubling the amount it received over 10
years.
 India is leading country for attracting greenfield FDI, not only Common wealth
but also from the world. In 2015, it overlooked China for the first time as the
biggest destination for greenfield FDI.
https://www.wallstreetmojo.com/foreign-direct-investment/

10. Cross Border M&A
 Overall mergers and acquisitions (M&A) in India, which hit a record high in the
first half of 2018, more than halved to $41.6 billion in the first half of 2019 as
both domestic and cross border deals declined, according to Refinitiv, a
financial market data provider owned by Blackstone and Thomson Reuters.
 Cross-border M&A deals witnessed a steep fall with a slowdown in inbound
M&A transactions, which recorded a 64.5% fall to $14.3 billion in the first six
months of the calendar year, compared to the corresponding period last year.
https://www.livemint.com/companies/start-ups/m-a-deals-more-than-halve-to-41-6-bn-in-january-june-
1562091912050.html

11. Policy Factors
 The approval of 100 per cent Foreign Direct Investment (FDI) in coal mining
and associated infrastructure
 The government allowed 100 per cent foreign investment in coal mining and
contract manufacturing, eased sourcing norms for single-brand retailers and
approved 26 per cent foreign investment in digital media, as it looks to boost
economic growth from over six-year low of 5 per cent.
Trade Tension
 US Trade Tensions

12. Business Factor
 Welcoming brands to enter online stores in India without going for brick &
moter stores in India.
 Retail trading through online trade can also be undertaken prior to opening
of brick-and-mortar stores, subject to the condition that the entity opens
brick-and-mortar stores within two years from date of start of online retail

13. Megadeals
 Megadeal: Saudi Aramco to invest Rs 1 lakh crore in RIL joint venture
 Such FDI deals are being predicted to be the biggest FDI investment
blooming the economy of FDI
https://www.google.com/search?ei=YOSQXfn0F86f9QPDzZEI&q=india+china+trade+tension&oq=india+china+trade+ten
sion&gs_l=psy-ab.3..33i22i29i30.13715.21512..21771...2.0..0.257.3602.1j23j2......0....1..gws-
wiz.....0..0i67j0i273j0i131j0j0i22i30.Huym81Eg0ag&ved=0ahUKEwj5pP-FwvbkAhXOT30KHcNmBAEQ4dUDCAs&uact=5

14. India Gross Fixed Capital Formation
Forecasts:
Real gross domestic product (GDP) is likely to grow at 6.9
per cent in 2019-20 and by 7.2 per cent in 2020-21.
Real private final consumption expenditure (PFCE) growth
is expected at 7.6 per cent during 2019-20, improving to
8.0 per cent during 2020-21.
The growth of real gross fixed capital formation (GFCF) is
likely to moderate to 7.6 per cent in 2019-20, but improve
to 9.1 per cent in 2020-21.
https://m.rbi.org.in/Scripts/
PublicationsView.aspx?id=189
74

15. Investment Promotion Agency
INVEST INDIA
 Invest India focuses on sector-specific investor targeting and development of
new partnerships to enable sustainable investments in India.
 Invest India is intended to become the first reference point for the global
investment community – both domestic and foreign.
 Make in India campaign / programe is managed by Invest India.
 Similar to Invest India there is another business portal of the Government
which provides a single window access to all possible business related
information vital for an entrepreneur, particularly for those of small and
medium firms.
 Invest India facilitates Amazon, Bosche and ThyssenKrupp.
https://www.investindia.gov.in/about-us

16. How the project met with the Objective
 India should use its advantages such as large domestic market, abundant
supply of trained and low waged labor , vast pool of technical professional
second largest nation etc.
 Economics' development strongly depends on FDI
 Maharashtra rank 1st with 17.5% FDI inflows , Delhi second with 12.1 %
followed by Karnataka and Gujarat.
 Lastly FDI affect the economy of the country positively by increasing the
revenue in the form of taxes strengthen the exchange rate of the country and
instigating the government to make policies with would attract more MNC’s to
it

17. Thank you