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1. Foreign Direct
Investment(FDI)

2. THE HISTORY OF FDI CAN BE TRACED BACK TO

3. (YEAR-1991)
ECONOMIC
CRISIS IN
INDIA

4. THE GOVERNMENT INTRODUCES
REFORMS
LIBERALISATION
PRIVATISATION
GLOBALISATION

5. AIMED AT EXPOSING THE INDIAN
ECONOMY TO THE WORLD

6. AS A RESULT OF THESE REFORMS
INDIA OPENED IT’S DOORS FOR
FOREIGN INVESTMENT

8. Investment was
introduced in 1991
under Foreign
Exchange Management
Act (FEMA), driven by
then Finance Minister
Dr. Manmohan Singh.

9. WHAT IS

10. Foreign direct investment (FDI) is a
direct investment into production or
business in a country by an individual
or company in another country, either
by buying a company in the target
country or by expanding operations of
an existing business in that country.
In its classic form,
Foreign direct
investment (FDI) is
defined as a company
from one country making

11. WHY INVEST IN INDIA ?
India is the 7th largest and 2nd most
populous country in the world and is world’s
largest liberal democracy with sufficient
natural resources.
4th largest economy in the world in terms of
PPP(Purchasing Power Parity)
Skilled managerial and technical manpower
that matches the best available in the world.
Transparent environment that guarantees the
security of their long term investments.
Availability of highly competitive private
sector that provides considerable scope for
foreign direct investment, joint ventures and
collaborations.

13. direct investment in new facilities or the
expansion of existing facilities.
Investments which seek to acquire factors of
production that are more efficient than those obtainable in the
home economy of the firm.
Investments which aim at either penetrating new
markets or maintaining existing ones.
Investments which firms hope will increase
their efficiency by exploiting the benefits of economies of scale
and scope

14. Entry Routes for fdi in India
Investing in India
Automatic Route
Prior Permission
(FIPB)*
General rule
No prior permission
required.
Only information to the
Reserve Bank of India
within 15 days of inflow/
Issue of shares
By exception
Prior Government
Approval needed
Decision generally
Within 4-6 weeks
* Foreign Investment Promotion Board (FIPB)

15. FDI limits in main sectors of India :
Insurance –
…………………………………………… 49%
Telecommunications –
………………………………………. 74%
Petroleum Refining (Private Sector) –
…………………..100%

16. Advertising -
……………………………………………..100%
Electricity-
……………………………………………..100%
Trading-
……………………………………… 51%
Single Brand Retail-
…………………………………........100%
Cotd……….

17. Drugs & Pharmaceuticals-
………………………………….100%
Hotel & Tourism -
…………………………………………100%
Civil Aviation-
…………………………………………..49%
Tourism- …………………………………100%
Non-Banking Financial Companies (NBFC)-
……….……….100%
Cotd……….

18. i)Atomic Energy
ii) Lottery Business
iii) Gambling and Betting
iv) Business of Chit Fund
v) 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)
FDI is not permitted in following sectors:

19. vi) Trading in Transferable Development Rights
(TDRs).
vii) Manufacture of cigars, cheroots, cigarillos and
cigarettes, of tobacco or of tobacco substitutes.
viii)Mining of : iron, manganese, chrome, gypsum,
sulphur, gold, diamonds, copper, zinc and other
precious stones, metals & minerals
ix)Coal and Lignite
x)Arms And Ammunition

20. India
Present Status of Fdi in
India

21. STATUS OF FDI IN INDIA

24. 1991 - Indian economy opened & Actual trading in wholesale &
retail started.
1997 - FDI up to 100% allowed under automatic route in cash
& carry wholesale only after Govt. approval.
2006 - 51% FDI in Single Brand Retail.
2011 - 100% FDI in Single Brand Retail.
2012 - 51% FDI in Multi Brand Retail.
India 5th Largest retail market globally &
-third largest in Asia.
Contributes 14-15% in total GDP.
Fastest growing retail market in world.
Retail Sector In India - analysis

25. Lifestyle products that are widely accepted by the urban Indian
consumer.(Apparels, Cosmetics, Shoes, Watches, Beverages, Food and
even Jewellery)
Currently Indian Retail sector have sales of around $500 billion.
The retail sector of India handles about $250 billion every year,
and is expected by veteran economists to reach to $990 billion by
the year 2015.
The business in the organized retail sector of India is expected
to grow at the rate of 15-20% every year, and can reach the level
of $200 billion by the year 2015.

26. Types of Retail market in India
Organized - trading activities undertaken by licensed retailers, that is, those
who are registered for sales tax, income tax, etc. E.g.: Corporate backed
hypermarkets, supermarkets, retail chains etc.
Unorganized - traditional formats of low-cost retailing, for example, the local
kirana shops, owner manned general stores, paan/beedi shops, convenience
stores, hand cart and pavement vendors, etc.

27. Improves FOR-EX 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.

28. Foreign Players would displace the
unorganized retailers because of their
superior financial strengths.
Limited Employment Generation as it
cannot provide employment
opportunities to semi-illiterate
people. The entry of large global
retailers such as Wal-Mart would kill
local shops and millions of jobs.
FDI in retail will drain out the country’s

30. MY VIEWS
On the one hand because of penetrating pricing
definitely creates monopolistic market and because it
has potential to cause loss millions of families which will
occur to unorganized sector; FDIs shall not be allowed
in Retail sector.
Whereas on the other hand the concept of
globalization is the theme of LPG. By closing door of
your home, world outside will not stop from up gradation
and developing.

31. Our foreign dependency will affect our overall
development in technology, agriculture,
production etc. Accepting changes and
challenges is the truth of life. As far as
organized sector in India is concerned there
should be regulatory framework. As a
countrymen I hope for the best but at last its
all about natures law:
“Survival of the Fittest!”

32. After considering all the aspects related to FDI,
we can conclude that, though there are slight
disadvantages of it, but it is very important or we
can say life blood for a developing country for
there economic growth and stability and for
developed country, to continue their stability.
Considering foreign direct investment as an
important measure of a country’s economic growth
and development through introduction of foreign
CONCLUSI
ON

33. ANYWAY,THAT’S PRETTY MUCH
ALL I HAVE TO SAY
ABOUT FDI.
PREPARED AND
PRESENTED BY:
AVHINANDAN
KHAJURIA