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FOREIGN
DIRECT
INVESTMENT
Ambika Dixit – 19/FMS/MBA/012
Ashish Pansari – 19/FMS/MBA/078
Mayank Garg – 19/FMS/MBA/018
Mayank Jain – 19/FMS/MBA/087
Rajat Mangla – 19/FMS/MBA/098
DEFINITION OF FDI
A foreign direct investment (FDI) is an investment made by a firm or
individual in one country into business interests located in another
country. Generally, FDI takes place when an investor establishes foreign
business operations or acquires foreign business assets in a foreign
company. However, FDIs are distinguished from portfolio investments
in which an investor merely purchases equities of foreign-based
companies.
- investopedia.com
Foreign Direct
Investment
Direction of
Investment
Inward FDI
Outward FDI
Entry Mode
Greenfield
Brownfield
Sector
Industrial
Non Industrial
Target
Vertical
Horizontal
TYPES OF FDI
 Inflow of equipment and technology
 Employment Generation
 Improved customer welfare
 Integration into Global Economy
Knowledge and resource transfer
PROS OF FDI
 Competition for small and local industries
 Conflicts of Laws
 Loss of Control
 Effect on domestic culture
CONS OF FDI
ENTRY ROUTES OF FDI
AUTOMATIC
ROUTE
GOVERNMENT
APPROVAL
SHARE
ACQUISITION
NEW INVESTMENT
VIA EXISTING
COLLABORATOR
GENERAL
PERMISSION OF
RBI UNDER FEMA
INTERNATIONAL
FINANCIAL
INSTITUTIONS
4.22
2.79
2.24
1.13
Telecommunication
Service Sector
Computer Sofware and Hardware
Trading
0 0.5 1 1.5 2 2.5 3 3.5 4 4.5
Top 4 FDI Equity Industry for Q1 2019 (in Billion USD)
FDI Equity (in Billion USD)
TRENDS OF FDI
9158
6415
4462
2623
Service Sector
Computer Sofware and Hardware
Trading
Automobile Industry
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Top 4 Sectors Attracting FDI for 2018-19 (in Million USD)
FDI Equity (in USD Millions)
TRENDS OF FDI
16228
8084
3870
3139
2965
Singapore
Mauritius
Netherlands
USA
Japan
0 2000 4000 6000 8000 10000 12000 14000 16000 18000
Top 5 Countries with Highest Share in 2018-19 (in Billion USD)
FDI Equity (in USD Millions)
TRENDS OF FDI
5.33
4.67
1.35
1.45
0.47
Singapore
Mauritius
Netherlands
USA
Japan
0 1 2 3 4 5 6
Top 5 Countries with Highest Share in Q1 2019 (in Billion USD)
FDI Equity (in USD Billions)
TRENDS OF FDI
 In August 2019, government permitted 100% FDI under automatic route in
coal mining. Similar case in Insurance Intermediaries.
In Union Budget 2019-2020, the government of India proposed opening of
FDI in Aviation, Media (Animation, AVGC)
In February 2019, the Government of India released the Draft National E-
Commerce Policy which encourages FDI in the marketplace model of e-
commerce. Further, it states that the FDI policy for e-commerce sector has
been developed to ensure a level playing field for all participants.
No government approval will be required for FDI up to an extent of 100 per
cent in Real Estate Broking Services.
 Foreign airline can now invest up to 49% in Air India with Government
Approval
RECENT DEVELOPMENT IN FDI SCHEMES
Foreign Direct Investment in India has increased in past few
years due to recent efforts put forth by Government of India to
reduce the restrictions on Investment in sectors like coal
mining, telecommunication, insurance, etc. and as per the
survey conducted by Emerging Market Private Equity
Association (EMPEA), India has potential to become the most
attractive market for global partners by October 2020. This
has been made possible due to more attractive and investor
friendly FDI schemes launched recently.
CONCLUSION
• www.india-briefing.com/news/fdi-india-performance-overview-fy-
2019-18677.html/
• dipp.gov.in/sites/default/files/FDI_Factsheet_27May2019.pdf
• Wikipedia.org
• slideshare.net
• nber.org
• corporatefinanceinstitute.com
BIBLIOGRAPHY
THANK

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Foreign Direct Investment

  • 1. FOREIGN DIRECT INVESTMENT Ambika Dixit – 19/FMS/MBA/012 Ashish Pansari – 19/FMS/MBA/078 Mayank Garg – 19/FMS/MBA/018 Mayank Jain – 19/FMS/MBA/087 Rajat Mangla – 19/FMS/MBA/098
  • 2. DEFINITION OF FDI A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company. However, FDIs are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies. - investopedia.com
  • 3. Foreign Direct Investment Direction of Investment Inward FDI Outward FDI Entry Mode Greenfield Brownfield Sector Industrial Non Industrial Target Vertical Horizontal TYPES OF FDI
  • 4.  Inflow of equipment and technology  Employment Generation  Improved customer welfare  Integration into Global Economy Knowledge and resource transfer PROS OF FDI
  • 5.  Competition for small and local industries  Conflicts of Laws  Loss of Control  Effect on domestic culture CONS OF FDI
  • 6. ENTRY ROUTES OF FDI AUTOMATIC ROUTE GOVERNMENT APPROVAL SHARE ACQUISITION NEW INVESTMENT VIA EXISTING COLLABORATOR GENERAL PERMISSION OF RBI UNDER FEMA INTERNATIONAL FINANCIAL INSTITUTIONS
  • 7. 4.22 2.79 2.24 1.13 Telecommunication Service Sector Computer Sofware and Hardware Trading 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 Top 4 FDI Equity Industry for Q1 2019 (in Billion USD) FDI Equity (in Billion USD) TRENDS OF FDI
  • 8. 9158 6415 4462 2623 Service Sector Computer Sofware and Hardware Trading Automobile Industry 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Top 4 Sectors Attracting FDI for 2018-19 (in Million USD) FDI Equity (in USD Millions) TRENDS OF FDI
  • 9. 16228 8084 3870 3139 2965 Singapore Mauritius Netherlands USA Japan 0 2000 4000 6000 8000 10000 12000 14000 16000 18000 Top 5 Countries with Highest Share in 2018-19 (in Billion USD) FDI Equity (in USD Millions) TRENDS OF FDI
  • 10. 5.33 4.67 1.35 1.45 0.47 Singapore Mauritius Netherlands USA Japan 0 1 2 3 4 5 6 Top 5 Countries with Highest Share in Q1 2019 (in Billion USD) FDI Equity (in USD Billions) TRENDS OF FDI
  • 11.  In August 2019, government permitted 100% FDI under automatic route in coal mining. Similar case in Insurance Intermediaries. In Union Budget 2019-2020, the government of India proposed opening of FDI in Aviation, Media (Animation, AVGC) In February 2019, the Government of India released the Draft National E- Commerce Policy which encourages FDI in the marketplace model of e- commerce. Further, it states that the FDI policy for e-commerce sector has been developed to ensure a level playing field for all participants. No government approval will be required for FDI up to an extent of 100 per cent in Real Estate Broking Services.  Foreign airline can now invest up to 49% in Air India with Government Approval RECENT DEVELOPMENT IN FDI SCHEMES
  • 12. Foreign Direct Investment in India has increased in past few years due to recent efforts put forth by Government of India to reduce the restrictions on Investment in sectors like coal mining, telecommunication, insurance, etc. and as per the survey conducted by Emerging Market Private Equity Association (EMPEA), India has potential to become the most attractive market for global partners by October 2020. This has been made possible due to more attractive and investor friendly FDI schemes launched recently. CONCLUSION
  • 14. THANK