The document provides an overview of Foreign Direct Investment (FDI) in India from 1990 to 2014, detailing its definition, various sectors attracting FDI, limitations, and regulatory frameworks. Key sectors include telecommunications, pharmaceuticals, and retail, with significant investment growth noted in these areas, particularly due to India's economic expansion. The paper outlines both the benefits of FDI, such as job creation and technological transfer, and the concerns expressed by local businesses regarding competition and ownership.

1. FOREIGN DIRECT INVESTMENT
IN INDIA
(1990-2014)
BY
RAJU BISHNOI
14111033

2. CONTENT :-
● Introduction
● Data analysis
● FDI in various sectors
● Limits of FDI in different sectors
● Advantages/Disadvantages
● Conclusion
● References

4. FOREIGN DIRECT INVESTMENT
Meaning of FDI
FDI is direct investment into production in a country by a company
located in another country, either by buying a company in the target country or by
expanding operations of an existing business in that country.

6. FDI routes (contd…)
Automatic route :
Does not require any prior approval by either the government or RBI.
The investors are only required to notify regional office concerned of RBI within 30
days.
Government route :
FDI in activities not covered under the automatic route requires prior government
approval which are considered by the Foreign Investment Promotion Board
(FIPB), Department of Economic Affairs, Ministry of Finance.

7. What is Scope of FDI in India?
Why World is looking towards India for FDI?
India is the one of the fastest growing economies of the world. India is the 3rd
largest economy of the world in terms of purchasing power parity and thus looks attractive
to the world for FDI.
Some of the major economic sectors where India can attract investment are as follows:-
● Telecommunications
● Chemicals industry
● Information Technology
● Pharmaceutical industry
● media and entertainment sector

8. Name the sectors where FDI is NOT allowed in India
i) Atomic Energy
ii) Lottery Business including Government /private lottery, online lotteries
iii) Gambling and Betting including casinos etc.
iv) Chit funds business
v) Nidhi company-(borrowing from members and lending to members only).
vi) Manufacturing of Cigars and cigarettes, of tobacco or of tobacco substitutes.
vii) Services like legal, book keeping, accounting & auditing.

9. Name the authorities Dealing With Foreign Investment:
(a) Foreign Investment Promotion Board (FIPB) : The Board is responsible for clearance
of FDI proposals and review of the implementation of cleared proposals.
(b) Foreign Investment Implementation Authority (FIIA) : The authority works for quick
implementation of FDI approvals and resolution of operational difficulties faced by
foreign investors;
(c) Reserve Bank of India
(d) Investment Commission
(e) Project Approval Board

10. Some Foreign investors :
Media sector
Blackstone (USA)
Walt Disney (USA)
News Corp (USA)
BBC (UK)
Pharma sector
Teva Pharmaceuticals (Israel)
Nipro Corporation (Japan)
Johnson & Johnson (USA).....etc

15. FDI in Telecom sector :
Government allowed 100% FDI in this
sector earlier which was 74% .Up to 49%
FDI under the automatic route and up to
100% FDI with the government route.
During the 2013-14 , the sector had
received a total FDI of $1.3 billion and
2014-15 it reached $2.33billion.

16. FDI in Pharmaceutical :
India is expected to rank amongst the
top three pharmaceutical markets in
terms of incremental growth by 2020.
India is the sixth largest market globally
in terms of size.
So the investors are looking Indian
Pharma industry.
FDI flows into pharmaceutical
industry during 1991-92 was only US$
4.63 million and it reached US$
1123.46 million in 2012-13.

17. FDI in broadcasting sector:
India has a large broadcasting and
distribution sector,comprising 796
satellite TV channels,6000 multi-system
operators,7 DTH operators and 4 IPTV
service providers.
74% FDI under the broadcasting carriage
services investment policy, permissible
for Teleports, DTH, Cable Networks etc.
26% FDI under the broadcasting carriage
services investment policy, permissible
for FM Radio with the government
approval.

18. FDI IN M&E:
Reason to invest
● Total market size of the Indian
entertainment industry stood at
INR 918 Billion in 2013, growing by
11.8% over 2012.
● The size of the television industry
in India was estimated at INR 417
Billion in 2013.
● India is the world’s third largest TV
market, after China and the USA,
with 161 Million TV households.

19. FDI IN RETAIL :
FDI in Single Brand Retail is
up to 100% provided by
government of India in 2011
earlier which was 51% and in
Multi Brand Retail up to 51%
in september 2012 .
The Indian retail sector is
highly fragmented with 96-
97% of its business being
run by the unorganised
retailers.Retailing in India
accounts for about 22% of
its GDP.

20. Division of retail industry:-
1.organised-Organised retailing refers to trading activities
undertaken by licensed retailers, that is, those who are
registered for sales tax, income tax, etc.
2.Unorganised-Unorganised retailing, on the other hand,
refers to the traditional formats of low-cost retailing, for
example, the local kirana shops, owner manned general
stores, paan/beedi shops etc.

21. FDI IN INSURANCE SECTOR :
● India is the third most attractive foreign direct
investment in the world.
● The past figure of FDI in insurance sector was 26%.
● The present figure of FDI is 49%.
● India received approximately US$2390 million FDI in
july 2014.

23. Limits for FDI in different Sectors :
(A) 26% FDI is permitted in :
● Broadcasting Content Services: uplinking of news and current affairs channels
● Pension sector (allowed in October 2012 as per cabinet decision)
● Courier Services (through automatic route)
● FM radio
● Print media: publishing of newspaper and periodicals dealing with news and current
affairs through govt route
● Publication of Indian editions of foreign magazines dealing with news and current

24. Limits for FDI in different Sectors (contd…)
(B) 49% FDI is permitted in :
● Defence (raised from 26% to 49% ,investment through govt route/FIPB approval)
● Infrastructure investment
● Insurance (in July 2013 it was raised to 49% from 26% subject to Parliament
approval)
● Petroleum Refining (49% allowed under automatic route)
● Power Exchanges (49% allowed under automatic route)

25. Limits for FDI in different Sectors (contd…)
(C ) 51% is Permitted in :
● Multi-Brand Retail (Since September 2012 , before 2012 there was no FDI provided
in multi-brand retail sector)
● Petro-pipelines

26. Limits for FDI in different Sectors (contd…)
(D) 74% FDI is permitted in :
● Atomic minerals
● Satellites with the government approval
● DTH
● cable networks
● Teleports
● Petro marketing
● Coal and Lignite mines
● Credit information companies (raised from 49% to 74% in July, 2013)

27. Limits for FDI in different Sectors (contd…)
(E)100% FDI is permitted in :
● Advertisement
● Metro train
● Mines (gold, silver)
● Petroleum exploration
● Pharmaceuticals
● Pollution control
● Postal service
● Roads, highways, ports.
● Township
● Telecom (raised from 74% to 100% in july 2013)
● Wholesale trading

28. Limits for FDI in different Sectors (contd…)
(E)100% FDI is permitted in :
● Airports
● Single Brand Retailing (raised from 51% to 100% in 2011)
● Cold-storage
● BPO/Call centres
● E-commerce
● Energy (except atomic)
● export trading house
● Films
● Hotel and Tourism

29. Limits for FDI in different Sectors (contd…)
(E)100% FDI is permitted in :
● Publishing/printing of scientific and technical magazines/ journals/periodicals
through the government route
● Publication of facsimile edition of foreign newspaper through the government
route
● Tea Plantation (upto 49% through automatic route; 49-100% through FIPB
route)

30. What are the major benefits of FDI :
(a) Improves in economical position of the country.
(b) Employment generation and increase in production .
(c) Help in capital formation by bringing fresh capital.
(d) Helps in transfer of new technologies, management skills.
(e) Increases competition within the local market and this brings higher efficiencies.
(f) Helps in increasing exports.
(g) Increases tax revenues.

31. Why FDI is opposed by local people :
(a) Domestic companies fear that they may lose their ownership to overseas company.
(b) Small enterprises fear that they may not be able to compete with world class large
companies and may ultimately be edged out of business.
(c) Large companies of the world try to monopolise and take over the highly profitable
sectors.
(d) Government has less control over the functioning of such companies as they usually
work as wholly owned subsidiary of an overseas company.
(e) Effect on culture.

32. Conclusion :-
It can be summed up by saying that to attract FDI, India should use its
advantages such as large domestic market, increase in production and low-wage
labor, transfer of technologies, employment generation, etc. Economic
development strongly depends on FDI. Mauritius, USA, Netherlands, Japan, UK,
Germany, France, Singapore and Switzerland are the top foreign investors in
India.At present, Maharashtra,Dadra&Nagar Haveli,Daman&Diu rank first with 30
percent of FDI inflows, Delhi second with 12.1 percent. After Delhi , Karnataka and
Gujarat occupy next position respectively. India attracted 409 crores in 1991-92
and in july 2014 FDI inflow in India was 64193 crores.

33. Conclusion (contd…)
FDI in India has contributed effectively to the overall growth of the economy in the
recent times. FDI Policy permits FDI up to 100 percent from foreign investor
without prior approval in most of the sectors including the services sector under
automatic route. FDI in sectors/activities under automatic route does not require
any prior approval either by the Government or the RBI. Market oriented policies
are boosting economic activity, all round development and economic growth rate.
As the Indian economy gears up for competition in the international market,
overseas investors clearly see the potential for attractive returns from investment
in India, which is also evident from the already achieved FDI success stories.

34. References :-
https://www.makeinindia.com/policy/foreign-direct-investment/
https://www.rbi.gov.in
https://dipp.nic.in/English/Investor/FDI_Policies/FDI_policy.aspx
https://en.wikipedia.org/wiki/Foreign_direct_investment
http://economictimes.indiatimes.com/topic/FDI
http://www.indiastat.com/industries/18/foreigndirectinvestment/105/stats