Foreign direct investment (FDI) refers to cross-border investment by a company or individual in business interests located in another country. FDI plays an important role in India's economic development by providing capital, jobs, technology and boosting growth. While India receives around 25% of China's FDI, various sectors like infrastructure, automotive, airlines and textiles have seen increased FDI inflows in recent years due to government reforms. FDI can benefit India through infrastructure development, increased competition and technology advancement.

1. WHAT IS FDI?
• Foreign direct investment (FDI) is an
investment made by a company or individual
in one country in business interests in another
country, in the form of either establishingcountry, in the form of either establishing
business operations or acquiring business
assets in the other country, such as ownership
or controlling interest in a foreign company.

2. ROLE OF FDI IN INDIAROLE OF FDI IN INDIA

3. FDI IN INDIA
• FDI refers to capital inflows from abroad that
are invested in or to enhance the production
capacity of the economy. ... The main purpose
of the study is to investigate the impact ofof the study is to investigate the impact of
FDI on economic growth in India, from the
period of 1990 to 2011.

4. governmental support, FDI has helped the Indian economy grow
tremendously. But with $34 billion in FDI in 2007, India gets only
about 25% of the FDI in China.
Foreign direct investment (FDI) in India has played an important role
in the development of the Indian economy.
FDI in India has in a lot of ways enabled India to achieve aFDI in India has in a lot of ways enabled India to achieve a
certain degree of financial stability, growth anddevelopment.
This money has allowed India to focus on the areas that needed a
boost and economic attention, and address the various problems that
continue to challenge the country.
India has continually sought to attract FDI from the world’s major
investors.

5. FOREIGN DIRECT INVESTMENT
ADVANTAGES
• Economic growth
• Trade
• To increase
DISADVANTAGES
• Crowing of local industry
• Conflict of laws
• Loss of control• To increase
employment and skill
level
• Technology diffusion
and knowledge transfer
• Linkages and spillover
to domestic firms
• Loss of control
• Effect on national
environment
• Effect on culture

6. FDI inflow in India
• Foreign Direct Investment (FDI) inflows into India
increased by 29 % to a record $40 billion
during in the financial year ended March.
• If re-invested earnings ($10 billion), other capital• If re-invested earnings ($10 billion), other capital
($4.4 billion) and equity capital of unincorporated
bodies ($1 billion) are taken into account along
with $40 billion worth equity inflows, the total
FDI flows in FY'16 is the highest-ever at $55.4
billion.

8. Maximum inflows (equity) were from Singapore ($13.69
billion), followed by Mauritius ($8.35 billion), the US
($4.19 billion), the Netherlands ($2.64 billion) and Japan
($2.61 billion).
The previous highest FDI inflow was in FY12 when the
country received $46.55 billion, which was a 34 %
$34.8
$46.55 34 %
increase over $34.8 billion it got in FY11.
However, India recorded its largest-ever percentage
increase in FDI when it received $22.8 billion in
FY07, representing a 155% increase over the $8.9
billion in FY06.

9. FDI INFLOW CHART
$40.00
$50.00
Series 1
$0.00
$10.00
$20.00
$30.00
FY06
FY07
FY11
FY12
Series 1

12. FDI IN DIFFERENT SECTOR
• During 2014–15, India received most of its FDI
from Mauritius, Singapore, Netherlands, Japan and
the US. On 25 September 2014, Government of
India launched Make in India initiative in which
policy statement on 25 sectors were releasedpolicy statement on 25 sectors were released
with relaxed norms on each sector.
• Following are some of major sectors for Foreign
Direct Investment.

13. Infrastructure
10% of India's GDP is based on construction activity. Indian government has plans to invest
$1 trillion on infrastructure from 2012–2017. 40% of this $1 trillion is to be funded by
private sector. 100% FDI under automatic route is permitted in construction sector for cities
and townships.
Automotive
FDI in automotive sector was increased by 89% between April 2014 to February 2015. India is
7th largest producer of vehicles in the world with 17.5 million vehicles annually. 100% FDI is
permitted in this sector via automatic route. Automobiles shares 7% of the India's GDP.
Airlines
Foreigner investment in a scheduled or regional air transport service or domestic scheduled
passenger airline is permitted to 100,with FDI up to 49% permitted under automatic route and
beyond 49% through government approval.For airport modernization, 100% FDI will be
allowed for existing airport under automatic route.
Textile
Textile is one major contributor to India's export. Nearly 11% of India's total export is textile.
This sector has attracted about $1647 million from April 2000 to May 2015. 100% FDI is
allowed under automatic route. During year 2013–14, FDI in textile sector was increased by
91%. Indian textile industry is expected reach up to $141 billion till 2021.

14. FDI IN DIFFERENT SECTOR
THROUGH CHART
INFRASTRUCTUREINFRASTRUCTURE
AUTOMOBILE
AIRLINES
TEXTILE

15. TOP 10 COUNTRIES HAVING HIGHEST
FDI INFLOW
1. MAURICIAS
2. SINGAPOUR
3. U.K
4. JAPAN4. JAPAN
5. U.S.A
6. NETHERLAND
7. CRPRUS
8. GERMANY
9. FRANCE
10.U.A.E

16. HOW FDI IS
HELPFUL FOR
INDIA?

17. Will be used for infrastructural development. (DMIC)
Will be helpful in capital development in various sectors.
Will build efficient supply chains.
Will provide jobs for millions through industrial investment.
Will bring in state-of-the-art foreign technology.
Many sectors allow only 49% so the effective control is still in India's hands.
Will bring in state-of-the-art foreign technology.
Many sectors allow only 49% so the effective control is still in India's hands.
The regulations are strict too so there wont be any exploitation.
Many leftists are worried about FDI because they think the colonialism will repeat again.
After all, the britishers were also a kind of FDIs.
But, the difference is that the British took capital out of India, but the FDIs in this case
will bring capital into India.

18. IMPORTANCE OF FDI
• FDI is often seen as a catalyst for a country`s
development and economic growth.
• Foreign direct investment allows company to
accomplish several tasks.accomplish several tasks.
1. Integration into global economy
2. Technology advancement
3. Increased competition
4. Improvement in human resource

19.  Reason for importance of FDI is not only the
fact that foreign investor finances the
“hardware” such as investment in new plants
and equipment ,but FDI can be a major
transfer of technology , knowledge and capital
for the host industries.
With FDI comes financial and managerial
resource, access to larger markets, technical
assistance and strategic assets, for instance;
Brand name, which can give the host firms
, domestic and international , comparative
advantages.

20. Steps taken by government to
promote FDI
• The Indian Government has taken a number of steps to show
its willingness to allow more foreign direct investment in the
country.
• In the infrastructure development sector, it has relaxed the
norms pertaining to area restriction, the laws regarding
gaining a comfortable exit from a particular project and thegaining a comfortable exit from a particular project and the
requirements relating to minimum capitalization.
• If companies are ready to commit 30 percent of their
investments for affordable housing, then the rules for
minimum capitalization and area restriction will be waived
off.
• It is expected that this will benefit the construction sector a
lot, especially in the form of greater investment inflow.