Foreign Direct Investment in India

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Foreign Direct Investment in India

  1. 1. CONTENTS Introduction. Types Of Investments in INDIA by Foreigners. Entry Routes. Retail trade- Backbone of Indian Economy. Failure of Local Government . Criteria for FDI . Advantages of FDI. Sectors where 100% FDI permitted in INDIA. Its turn for India – Our Country. FDI –a big benefit. MNC Regime. Conclusion.
  2. 2. Portfolio investment:Investment that does not involve obtaining a degree of control in a company Foreign Direct Investment : Purchase of physical assets or a significant amount of the ownership (stock) of a company in another country to gain a measure of management control
  3. 3. INVESTING IN INDIA – ENTRY ROUTES Investing in India Prior Permission Automatic Route (FIPB)General Rule By ExceptionNo prior permission Prior GovernmentRequired. Inform Reserve Bank Approval needed.within 30 days of Decision generallyinflow/issue of shares. within 4-6 weeks
  4. 4. RETAIL TRADE : BACKBONE OF INDIAN ECONOMY After agriculture, Retail trade provides employment to maximum number ofpersons.1.25 crore shops - employed 4 crore people. contributes 10% - 11% of our country’s GDP. Sophisticated techn & more investment is not required in retail trade.Small Retail shops provide more employment then large chain of Retailstores.There is no gestation period. Hence business starts from day one.
  5. 5. FAILURE OF LOCAL GOVERNMENT Traders are being ignored by the government. lagged in infrastructure, irrigation power etc.- require huge investment- govt. feels -traders incompetent to serve. So, instead of development of such areas- the govt. handed over retail trade to foreigners. FOREIGNERS - more dearer than INDIANS. Anti – trader laws were designed.
  6. 6. THE CRITERIA FOR FDI In 1991-92, the then Finance Minister and present Prime Minister Dr. Manmohan Singh referred to certain criteria for allowing FDI in India. They were :1. Establishment of basic industries requiring huge capital and advanced sophisticated technology.2. Infrastructure projects like electricity generation road building etc.3. Projects which would generate employment.
  7. 7. ADVANTAGES OF FDI Increase investment level and thereby income & employment. Increase tax revenue of government. Facilitates transfer of technology. Encourage managerial revolution through professional management. Increase exports and reduce import requirements. Increase competition and break domestic monopolies. Improves quality and reduces cost of inputs.
  8. 8. 100% FDI PERMITTED IN INDIA Engineering & Manufacturing sectors. Tourism & hotels. Advertising & Film industry. Roads & Highways, Ports and Harbors. Industrial model towns/industrial parks. Pollution Control and Management. Power generation (hydro-electric, coal/lignite, oil or gas based). Information Technology including E-Commerce.
  9. 9. NOW ITS TURN FOR INDIA Kamal Nath, Union Urban Development and Poverty Alleviation Minister said, Advantages of having backend and cold-chains formation, sourcing, quality standardisation, etc are going to mainly help our agricultural sector. Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission, FDI is not a threat to small retailers and it will create efficiency in supply chain infrastructure. So that , Wastage will fall, leading to lower prices of primary commodities. In India, 30% of fruits and vegetables, and 5-7% of grains are wasted between harvest and consumption. Restructuring to create entities to work in the current framework would need a lot of thought, but managing an efficient supply chain, considering that only nine States have given approval, will pose a big challenge, according to Rachna Nath.
  10. 10. FDI- A BIG BENEFIT The FDI in multi-brand retail - benefit the farmers who will get a fair price by selling their products directly to the retail companies. This step will increase prices paid to farmers, reduce prices for customers, reduce agricultural wastage and create thousands of jobs. As many as 40 % of vegetables are rotting as there is no backend. Multi-brand retail is a model that will work and the advantages outweigh the risks.
  11. 11. CONTRACT FARMING COLLECTION OF TO OWN FACTORY AGRICALTURE PRODUCTSTO CUSTOMER TO OWN DEPT. STORE
  12. 12. CONCLUSIONo If the FDI is in the limit and the in the control of our government, then it will surely benefit our country. And its also a great privilege that “India” is the second attractors of foreigners. Retail traders will also improve their standards and the channelization. This could be a big benefit, given that Indian retail chains have so far lacked the capital and incentive to invest in supply chains.
  13. 13. R.M.K. E-CELLMail id:rmkecell@gmail.com ThankFacebook of rmk ecell:www.facebook.com/rmkecell you Presented by G.Sangeetha(ECE- final year).

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