TataKelola dan KamSiber Kecerdasan Buatan v022.pdf
4 fdi
1. Topic : FDI
Submitted To: Submitted By
................................. .................................
2. Foreign direct investment (FDI) is an investment in a business by an investor
from another country for which the foreign investor has control over the
company purchased.
The Organization of Economic Cooperation and Development (OECD)
defines control as owning 10% or more of the business.
Businesses that make foreign direct investments are often called multinational
corporations (MNCs) or multinational enterprises (MNEs).
An MNE may make a direct investment by creating a new foreign enterprise,
which is called a greenfield investment, or by the acquisition of a foreign
firm, either called an acquisition or brownfield investment.
3. Access to markets
Access to resources
Reduces cost of production
FDI offers a source of external capital
development of new industries
learning is an indirect advantage for foreign countries
4. The Indian Government has taken a number of steps to show its
willingness to allow more foreign direct investment in the country.
In the infrastructure development sector, it has relaxed the norms
pertaining to area restriction.
If companies are ready to commit 30 percent of their investments for
affordable housing, then the rules for minimum capitalization and area
restriction will be waived off.
6. Domestic capital is inadequate for purpose of economic growth;
Foreign capital is usually essential, at least as a temporary measure, during
the period when the capital market is in the process of development;
Foreign capital usually brings it with other scarce productive factors like
technical know how, business expertise and knowledge
7. Improves forex position of the country;
Employment generation and increase in production ;
Help in capital formation by bringing fresh capital;
Helps in transfer of new technologies, management skills, intellectual
property
Increases competition within the local market and this brings higher
efficiencies
Helps in increasing exports;
Increases tax revenues
8. Domestic companies fear that they may lose their ownership to overseas
company
Small enterprises fear that they may not be able to compete with world class
large companies and may ultimately be edged out of business;
Large giants of the world try to monopolise and take over the highly profitable
sectors;
Such foreign companies invest more in machinery and intellectual property
than in wages of the local people;
Government has less control over the functioning of such companies as they
usually work as wholly owned subsidiary of an overseas company;
9. India is the 3rd largest economy of the world in terms of purchasing power
parity and thus looks attractive to the world for FDI.
Government of India, has been trying hard to do away with the FDI caps
for majority of the sectors, but there are still critical areas like retailing and
insurance where there is lot of opposition from local Indians / Indian
companies.
11. Atomic Energy
Lottery Business
Gambling and Betting
Business of Chit Fund
Nidhi Company
Agricultural (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, Pisciculture and
cultivation of vegetables, mushrooms, etc. under controlled conditions and services related to agro and allied sectors)
and Plantations activities (other than Tea Plantations)
Trading in Transferable Development Rights (TDRs).
Manufacture of cigars, cheroots, cigarillos and cigarettes, of tobacco or of
tobacco substitutes.
