very helpfull for students.

1. 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. Foreign direct
investment is in contrast to portfolio investment which
is a passive investment in the securities of another
country such as stocks and bonds.

2. Horizontal FDI arises when a firm duplicates
its home country-based activities at the same
value chain stage in a host country through FDI.
Platform FDI Foreign direct investment from a
source country into a destination country for the
purpose of exporting to a third country.
Vertical FDI takes place when a firm through FDI
moves upstream or downstream in different value chains
i.e., when firms perform value-adding activities stage by
stage in a vertical fashion in a host country.

3. • Inflow of equipment and technology
• Competitive advantage & innovation
• Financial resources for expansion
• Employment generation
• Contribution to exports
Advantages

4. • Crowding of local industry.
• Conflicts of laws
• Effect on natural environment
• Loss of control
• Effect on local culture

5. The foreign direct investor may acquire voting power of an enterprise in an economy
through any of the following methods:
 by acquiring shares in an associated enterprise
 through a merger or an acquisition of an unrelated enterprise
 participating in an equity joint venture with another investor or
enterprise
 by incorporating a wholly owned subsidiary or company
anywhere

6.  Low corporate tax and individual income tax rates
 Tax holidays
 Other types of tax concessions
 Preferential tariffs
 Special economic zones
 Epz – export processing zones
 Bonded warehouses
 Maquiladoras
 Investment financial subsidies
 Soft loan or loan guarantees
 Free land or land subsidies
 Relocation & expatriation
 Infrastructure subsidies
 R&d support
 Derogation from regulations (usually for very large projects)

7.  Profitability: Attract where return on investment is
higher
 Costs of production: Encouraged by lower costs of
production like raw materials, labor .
 Economic Conditions: Market
potential, infrastructure, size of population, income
level etc
 Government policies: Policies like foreign
investment, foreign
collaboration, remittances, profits, taxation, foreign
exchange control, tariffs etc.
 Political factors: Political stability, nature of important
political parties and relations with other countries.

8. • We are the second highest producer of fruits and
vegetables in the world but still we are not able to utilize
is properly because of inadequate infrastructure
facilities.
• It will reduce pre-harvest wastage/losses and thus help
control food inflation.
• It will create 1.5 million more jobs in 5 years. Apart
from the huge number of indirect employment.
• It will increase competition which is always beneficial
for the customer.
• It will remove the middleman from the equation. It will
reduce costs which in turn will reduce prices.

9. • At least 10% of shares of Co; needed to qualify
as FDI.
• Mauritius has been the largest direct investor
in India.(US$20 billion)
• The United States is the second largest investor
in India.(US$6 billion)
• U.S is the worlds largest recipient of FDI.

10. By vishal rana
Contact-
Email- vishalrana2690@gmail.com
Twitter- @vishalrana2690
Facebook- www.facebook.com/vishal.rana.rana.vishal