This document provides an overview of foreign direct investment (FDI) in India. It defines FDI as investment made by an entity in an enterprise located in a different country, where the investor obtains influence or control. It outlines the two routes for FDI in India - direct and government - and the roles of the Reserve Bank of India and Foreign Investment Promotion Board in regulating FDI. It discusses advantages like technology transfer and disadvantages like crowding out local industry. It provides statistics on top investing countries and sectors for FDI in India. Finally, it explains the implications of allowing 51% FDI in multi-brand retail.

1. Introduction…
• Strategy for companies that wish to operate
on a global basis.
• Refers to the investment made by an entity in
an enterprise located in a different country.

2. • Investor will get certain degree of influence or
control over the management of the
enterprise.
• An Indian company can receive Foreign Direct
Investment under the two routes:
 Direct Route
 Govt. Route
• Inward foreign direct investment
• Outward foreign direct investment

3. • RBI
• F I P B(foreign investment promotion board) of
the dept of commerce under ministry of
finance.

4. FDI advantages and Disadvantages
Advantages Disadvantages
• Inflow of equipment and • Crowding of local industry.
technology.
• Competitive advantage & • Conflicts of laws
innovation. • Loss of control.
• Financial resources for
expansion. • Effect on natural
• Employment generation. environment.
• Contribution to exports • Effect on local culture.
growth.
• Improved consumer welfare
through reduced cost , wider
choice and improved quality.

5. Facts…
• 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.

6. • Mumbai and New Delhi are two major cities
where FDI inflows is heavily concentrated.
• FDI inflows for January-December 2010 stood at
$21 billion.
• $27.5 billion during January-December 2011
period.
• Retailing is the single largest component of the
services sector in terms of contribution to GDP.

7. What does 51% FDI in multi-brand
retail mean?

8. • Minimum investment of $100 million.
• 50% of the investment is to be in backend
infrastructure development.
• 30% of all raw material has be procured from
India's small and medium industries.
• Permission to set up malls only in cities with a
minimum population of 10 lakhs.
• Government has the first right to procure material
from the farmers.
• Products should be sold under the same brand
internationally.
• Foreign investor should be the owner of the
brand.

9. Present Condition:
• Farmers get only 10 to 15% of the price we
pay.
• 3-4 middlemen in between farmers and
customers.
• Huge post produce losses for farmers due to
inadequate facilities.
• A poorly managed food supply infrastructure.

10. Why do we need it:
• 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.

11. • FDI in aviation: Allow foreign airlines to
invest 49% in domestic carriers
• Allowed by non-airline players, but bars
foreign airlines from investing in them,
primarily due to security reasons.

12. Thanks
Sudheesh. P. V
sudhi89@gmail.com