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FOREIGN
DIRECT
INVESTMENT
Submitted To : Miss. Ankita Sharma
Submitted By :
Ankita Sharma(16M907)
Robin Saklani(16M911)
WHAT IS FDI ?
– Foreign direct investment (FDI) is
an investment made by a company
in business interests in another
country, either as establishing
business operations or acquiring
business assets in the other
country.
RELATED TERMS
– Foreign Subsidiaries
– Host Country
– Flow of FDI
– Stocks of FDI
– Outflows/ Inflows of FDI
Source: UNCTAD, World Investment Report
TYPE OF FDI
– Horizontal FDI :- MNE enters a
foreign country to produce the
same products , product at home.
– Conglomerate FDI :- MNE
produces products not
manufactured at home.
– Vertical FDI :- MNE produces
intermediate goods either forward
or backward in supply stream.
TRENDS IN FDI
FDI has grown rapidly than World Trade :
 Way to avoiding trade barriers.
 Dramatic political and economic changes.
 Globalization of world economy.
NEED OF FDI
FIRM
 New markets and marketing
channels.
 Cheaper production facilities
 Access to new technology
 Products skills and financing.
 Labor Expertise
HOST COUNTRY
 a source of new technologies
 sources of capital
 new processes
 new products
 organizational technologies and
management skills
IMPORTANCE
– Avoid foreign govt. pressure for local production.
– Making move ,domestic export to global export.
– Capability to increase total production capacity.
– Gain opportunities for co production joint venture with local
partners .
ROUTES
GOVERNMENT ROUTE
Prior approval by government is
needed via this route. Foreign
Investment Promotion Board is the
responsible agency to oversee
this route.
AUTOMATIC ROUTE
No approval required by Government
or RBI.
IMPACT
– Country’s trade balance.
– Increasing labor standards and
skills.
– Transfer of new technology and
innovative ideas.
– Improving infrastructure skills and
general business climate.
SECTOR WISE FDI INFLOW
IN INDIA (2000-2016)
Source : Govt of India Website
LATEST FDI REFORMS BY
GOVT OF INDIA
– Decision to further liberalise FDI
regime was taken at a meeting chaired
by Prime Minister Narendra Modi on
June 20, 2016.
OBJECTIVE
– Providing major impetus to
employment and job creation in India.
* Source : The Hindu (June 2016) Radical FDI reforms in India
SECTOR WISE FDI REFORMS
– Upto 100 % FDI in Defence Sector(49% and 100% through Automatic and FIPB Route)
– Upto 100% FDI in brownfield pharmaceuticals(74% through Automatic route)
– 100% FDI in civil aviation.
– 74% FDI in private banking sector. (With no change in Management)
– 100% FDI under automatic route for Cable Networks, DTH .(except News Channels)
– 100% FDI in e-commerce and Single Brand Retail.
– 100% FDI in Tea , Coffee plantation.
*Source :The Hindu (June 2016) Radical FDI reforms in India
FDI PROBHITED
– Multi-Brand Retail
– Gambling
– Betting & Lottery
– Atomic energy.
FDI INFOW IN INDIA (2015-16)
Source: Reseve Bank of India Website
DISADVANTAGE
– Inflation increases slightly.
– Domestic firms suffer.
– country become dependent.
– Company may loose ownership.
– Country’s secretes may disclosed.
SOURCE
• http://www.makeinindia.com/policy/foreign-direct-investment
• http://unctad.org/en/
• http://www.thehindu.com/news/national
• www.investopedia.com
• www.economywatch.com
• www.economictimes.com
Thank You

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FDI

  • 1. FOREIGN DIRECT INVESTMENT Submitted To : Miss. Ankita Sharma Submitted By : Ankita Sharma(16M907) Robin Saklani(16M911)
  • 2. WHAT IS FDI ? – Foreign direct investment (FDI) is an investment made by a company in business interests in another country, either as establishing business operations or acquiring business assets in the other country.
  • 3. RELATED TERMS – Foreign Subsidiaries – Host Country – Flow of FDI – Stocks of FDI – Outflows/ Inflows of FDI Source: UNCTAD, World Investment Report
  • 4. TYPE OF FDI – Horizontal FDI :- MNE enters a foreign country to produce the same products , product at home. – Conglomerate FDI :- MNE produces products not manufactured at home. – Vertical FDI :- MNE produces intermediate goods either forward or backward in supply stream.
  • 5. TRENDS IN FDI FDI has grown rapidly than World Trade :  Way to avoiding trade barriers.  Dramatic political and economic changes.  Globalization of world economy.
  • 6.
  • 7. NEED OF FDI FIRM  New markets and marketing channels.  Cheaper production facilities  Access to new technology  Products skills and financing.  Labor Expertise HOST COUNTRY  a source of new technologies  sources of capital  new processes  new products  organizational technologies and management skills
  • 8. IMPORTANCE – Avoid foreign govt. pressure for local production. – Making move ,domestic export to global export. – Capability to increase total production capacity. – Gain opportunities for co production joint venture with local partners .
  • 9. ROUTES GOVERNMENT ROUTE Prior approval by government is needed via this route. Foreign Investment Promotion Board is the responsible agency to oversee this route. AUTOMATIC ROUTE No approval required by Government or RBI.
  • 10. IMPACT – Country’s trade balance. – Increasing labor standards and skills. – Transfer of new technology and innovative ideas. – Improving infrastructure skills and general business climate.
  • 11. SECTOR WISE FDI INFLOW IN INDIA (2000-2016) Source : Govt of India Website
  • 12. LATEST FDI REFORMS BY GOVT OF INDIA – Decision to further liberalise FDI regime was taken at a meeting chaired by Prime Minister Narendra Modi on June 20, 2016. OBJECTIVE – Providing major impetus to employment and job creation in India. * Source : The Hindu (June 2016) Radical FDI reforms in India
  • 13. SECTOR WISE FDI REFORMS – Upto 100 % FDI in Defence Sector(49% and 100% through Automatic and FIPB Route) – Upto 100% FDI in brownfield pharmaceuticals(74% through Automatic route) – 100% FDI in civil aviation. – 74% FDI in private banking sector. (With no change in Management) – 100% FDI under automatic route for Cable Networks, DTH .(except News Channels) – 100% FDI in e-commerce and Single Brand Retail. – 100% FDI in Tea , Coffee plantation. *Source :The Hindu (June 2016) Radical FDI reforms in India
  • 14. FDI PROBHITED – Multi-Brand Retail – Gambling – Betting & Lottery – Atomic energy.
  • 15. FDI INFOW IN INDIA (2015-16) Source: Reseve Bank of India Website
  • 16. DISADVANTAGE – Inflation increases slightly. – Domestic firms suffer. – country become dependent. – Company may loose ownership. – Country’s secretes may disclosed.
  • 17. SOURCE • http://www.makeinindia.com/policy/foreign-direct-investment • http://unctad.org/en/ • http://www.thehindu.com/news/national • www.investopedia.com • www.economywatch.com • www.economictimes.com