The document provides an overview of foreign direct investment (FDI) in India. It discusses the history and types of FDI, methods for investing, approval routes, sectors that attract FDI, top investing countries, benefits of FDI for home and host countries, risks, and how India can continue to grow through liberalizing FDI policies and attracting more foreign investment. Key figures presented include total FDI inflows to India increasing from $16 billion in 2013-14 to over $37 billion in 2017-18, with Mauritius and Singapore being the top investor countries.

1. Presenters :
Ankita Mahanta
Anuchika Das
Suman Satapathy
Manasmita Mohanty
Manoj Kumar Sahoo
Chiranjibi Bisoi

2. Introduction
 When a foreign individual or company is
establishes a business in other country and the
amount invested in such business is known as FDI
 The company of the country which invests in
other country is known as Home Country.
 And the Company in which FDI is done is known
as Host Country.

3. History of FDI
 In the years after the
second World War, Global
FDI was dominated by the
United State at the time of
1944. Since that time FDI
has Spread to become a
truly global phenomenon.
 FDI was introduced in the
Year 1991 under Foreign
Exchange management Act
(FEMA), by then Finance
Minister Dr. Manmohan
Singh

4. Types of FDI
By Direction
 Inward
 Outward
By Target
 Greenfield Investment
 Horizontal investment
 Vertical Investment

5. Methods of FDI
 The FDI may acquire
voting power of an
enterprise in an economy
through any of the
following methods.
 By incorporating a wholly
owned subsidiary or
company anywhere.
 By acquiring shares in an
associated enterprise.
 Through a merger or an
acquisition of an unrelated
enter.
 Participating in an equity
joint venture with another
investor or enterprise.

6. Route of FDI
 Automatic Route
Under the Automatic Route, the non-resident investor or
the Indian company does not require any approval from
Government of India for the investment.
 Government Route
Under the Government Route, prior to investment,
approval from the Government of India is required.
Proposals for foreign investment under Government
route, are considered by respective Administrative
Ministry/ Department.

13. PROCEDURES FOR GOVERNMENT
APPROVAL
1. Filing of Application through www.fifp.gov.in/
2. Internal Procedure for Approvals
3. Final Approval

14. Why is FDI important ? any
considerations of going global ?
 Foreign investment allows
companies to accomplish several
tasks:
 Avoiding foreign government
pressure for local production.
 Circumventing trade barriers,
 Making the move from domestic
export sales to a locally based
national sales office.
 Capability to increase total
production capacity.
 Opportunity for co-production, joint
venture with local partners, joint
marketing arrangements.

15. Difference between FDI and FPI
FDI
1. Physical Asset
2. Efficient
3. Difficult
4. Transfer of Funds,
Technology and other
resources.
5. Active
6. High
7. Long Term
FPI
1. Financial Asset
2. Less Efficient
3. Relatively Easy
4. Capital Inflow
5. Passive
6. Very Less
7. Short Term

16. Benefits of FDI
 Increase Employment And Economic Growth
 Human Resource Development
 Development of Backward Areas
 Provision of Finance & Technology
 Increase In Exports
 Exchange Rate Stability
 Stimulation of Economic Development
 Improved Capital Flow
 Creation of A Competitive Market

17. Who regulate FDI in India ?
 According to Organization
for Economic Co-Operation
and Development (OECD),
an Investment of 10% or
above from Overseas is
considered as FDI.
 In India, Foreign Direct
Investment Policy is
Regulated under the Foreign
Exchange Management Act,
2000 Governed by the
Reserve Bank of India.

18. FDI in India, whether profit or loss to
India ?
 World economic forum 2018 ( creating a shared
future in a fractured world)
 Narendra Modi became first Indian PM to address
the world economic forum Annual Summit after
1997 and Delivered his speech as “BASUDHAIBA
KUTUMBAKAM”

19. Global FDI Confidence Index
 India jumps to 8th place on
Global place on Global
Confidence Index 2017.
 India attracted, $62.3
Billion in the Year 2016 and
Retained as Top Rank
 Indian Cabinet on further
eased foreign direct
investment (FDI) key
sectors (e.g. Retail, Civil,
Aviation, Contribution &
Power Exchange)

20. Single Brand Retail Operation
 The mandatory requirement
of purchasing power 30%
goods locally.
 The decision will benefit
world’s leading smartphone
maker Apple and Swedish
home furnishing major
“IKEA”
Disadvantages
 Threat to Local Market
 Employment Aspects of FDI
Remains Critical.

21. The impact of FDI on the Home country
 Benefits
 Access to Markets
 Access to resources
 Reduce cost of production
 Incentives
 Cost
 Risk from political changes
 Hindrance to domestic investment
 Economic Non-viability
 Unemployement

22. The impact of FDI on the Host country
 Benefits
 Improving The BOP
 Proving Employment
 Source of Tax Revenue
 Technology Transfer
 Infrastructure
 Improve Reputation
 Cost
 Cultural And Political Interference
 Unhealthy Competition
 Over Utilization of Local Resources
 Violation of Human Rights
 Threat to Indigenous Technology
 Threat to Local Products

23. Investments risk in India
 Sovereign Risk
 Commercial Risk
 Political Risk
 Risk due to Terrorism

24. Sector wise FDI inflows
Sectors 2013-14 2014-15 2015-16 2016-17 2017-18
Communication Services 1,256 1,075 2,638 5,876 8,809
Manufacturing 6,381 9,613 8,439 11,972 7,066
Retail & Wholesale Trade 1,139 2,551 3,998 2,771 4,478
Financial Services 1,026 3,075 3,547 3,732 4,070
Computer Services 934 2,154 4,319 1,937 3,173
Business services 521 680 3,031 2,684 3,005
Electricity and other energy
Generation, Distribution & Transmission
1,284 1,284 1,364 1,722 1,870
Construction 1,276 1,640 4,141 1,564 1,281
Transport 311 482 1,363 891 1,267
Miscellaneous Services 941 586 1,022 1,816 835
Restaurants and Hotels 361 686 889 430 452
Real Estate Activities 201 202 112 105 405
Education, Research & Development 107 131 394 205 347
Mining 24 129 596 141 82
Trading 0 228 0 0 0
Others 293 232 215 470 226

25. Top 5 Sectors of FDI In flow
2013-14 2014-15 2015-16 2016-17 2017-18
Communication Services 1,256 1,075 2,638 5,876 8,809
Manufacturing 6,381 9,613 8,439 11,972 7,066
Retail & Wholesale Trade 1,139 2,551 3,998 2,771 4,478
Financial Services 1,026 3,075 3,547 3,732 4,070
Computer Services 934 2,154 4,319 1,937 3,173
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000

26. Amounts in US$ Million
Countries 2013-14 2014-15 2015-16 2016-17 2017-18
Mauritius 3,695 5,878 7,452 13,383 13,415
Singapore 4,415 5,137 12,479 6,529 9,273
Netherlands 1,157 2,154 2,330 3,234 2,677
USA 617 1,981 4,124 2,138 1,973
Japan 1,795 2,019 1,818 4,237 1,313
Cayman Islands 25 72 440 49 1,140
Germany 650 942 927 845 1,095
Hong Kong 85 325 344 134 1,044
United Kingdom 111 1,891 842 1,301 716
Switzerland 356 292 195 502 506
UAE 239 327 961 645 408
France 229 347 392 487 403
China 121 505 461 198 350
Italy 185 167 279 364 308
South Korea 189 138 241 466 293
Cyprus 546 737 488 282 290
Canada 11 153 52 32 274
Others 1,626 1,682 2,243 1,490 1,889
Main Source of FDI in India

27. Top 5 Countries investing FDI in India
2013-14 2014-15 2015-16 2016-17 2017-18 Average
Mauritius 3,695 5,878 7,452 13,383 13,415 8,765
Singapore 4,415 5,137 12,479 6,529 9,273 7,567
Netherlands 1,157 2,154 2,330 3,234 2,677 2,310
USA 617 1,981 4,124 2,138 1,973 2,167
Japan 1,795 2,019 1,818 4,237 1,313 2,236
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000

28. Mauritius
29%
Singapore
25%
Netherlands
8%
USA
7%
Japan
7%
Cayman Islands
1%
Germany
3%
Hong Kong
1%
United Kingdom
3%
Switzerland
1%
UAE
2%
France
1%
China
1%
Italy
1%
South
Korea
1%
Cyprus
2%
Canada
0%
Others
6%
FDI IN INDIA

29. How can India grow through FDI ?
 In 2014, the government increased
foreign investment upper limit from
26% to 49% in insurance sector. In
2019 Budget it further increased to
100%.
 It also launched Make in
India initiative in September 2014
under which FDI policy for 25 sectors
was liberalized further.
 As of April 2015, FDI inflow in India
increased by 48% since the launch of
"Make in India" initiative.
 The Department for Promotion of
Industry and Internal Tradeand Invest
India has developed the India
Investment Grid (IIG) which provides a
pan-India database of projects from
Indian promoters for promoting and
facilitating foreign investments.

30. Rank of INDIA in World
15th in 2013
9th in 2014
8th in 2017

31. Outward FDI from India
 According to the data provided by Reserve Bank
of India (RBI), India’s outward Foreign Direct
Investment (OFDI) in equity, loan and
guaranteed issue stood at US$ 11.33 billion in
2017-18 and US$ 1.69 billion in February 2019.

32. 16,054
24,748
36,068 36,317
37,366
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2013-14 2014-15 2015-16 2016-17 2017-18 P
Total FDI