Foreign direct investment (FDI) refers to investments made by companies located in one country into companies based in another country. India has pursued several initiatives to attract more FDI to help accelerate economic growth and development. FDI provides capital, technology, managerial skills and competitive pressure that benefit India's economy. Major sectors that receive FDI include services, infrastructure, insurance and broadcasting. Some examples of large FDI investments in India include deals between BP and Reliance, Vodafone's acquisition of Hutchison's India business, and Daiichi Sankyo's purchase of Ranbaxy Laboratories. The Indian government aims to continue liberalizing FDI policies to further economic development.

2. Foreign Direct Investment (FDI)
• A foreign direct investment (FDI) is an investment made by a company or entity
based in one country, into a company or entity based in another country.
• Foreign direct investments differ substantially from indirect investments such as
portfolio flows, wherein overseas institutions invest in equities listed on a
nation's stock exchange.

4. Cntd…..
• India is the second fastest growing economy in the world with a GDP growth rate
of 7.6% in the FY16.
• In terms of GDP it is the 10th largest economy in the world and in terms PPP
(Purchasing Power Parity) it is the 3rd largest economy in the world.
• Government of India has taken many initiatives to attract foreign investment into
India.
• One of such initiative is “Make in India”, programme to make India a
‘Manufacturing Hub’ of the world.

5. 1. Accelerated Economic Growth
• It has been witnessed that with the increase in FDI inflows in India from $0.13
billion to $30.3 billion in 2010-11, the GDP growth rate of the country has
accelerated from 1.43 percent in 1990-91 to 7.6 percent in 2015-16. It shows that
India’s GDP has increased four times since 1990-91.

6. 2. ACCELERATED ECONOMIC DEVELOPMENT
• FDI act as a catalyst in various sectors mainly in manufacturing and service sectors.
• With the new government in power, there are many reforms to attract FDI inflows in the
country. FDI inflows in 2015-16 are more in the areas of service sectors (18%), construction
development (10%), telecommunication (7%), computer software and hardware (6%) etc.
• With FDI inflows there are development in many areas like infrastructure, per capita income
and standard of living of the people has increased, poverty has declined in absolute terms,
unemployment has reduced by 3 times since 1990-91 to 2013-14, clean technology has installed,
roads, dams, bridges, schools, colleges, hospitals has been built with new technology. Thereby,
overall development has shown in all over India.

7. 3. CAPITAL
• For the economic growth and development of the country India requires huge
capital. To compensate this domestic capital requirement, FDI inflows are one of
the important pre-requisite. FDI is helping developing countries in capital
formation by bringing fresh capitals.
4. TECHNOLOGY:
Developing countries are lacking technological know-how. With the opening up of
their economies for FDI, they will get the access to sophisticated technology from
the foreign firms which will enhance their productivity and quality of the products.

8. 5.Managerial Skills
• FDI inflows are not only helping in capital formation but also help in developing
managerial skills.
6. Competitive Environment
FDI inflows have increased the competitive environment for the domestic firms
consequently benefitting the consumers by accessing with better quality products
at a lesser price.

9. FDI IN DIFFERENT SECTORS
• We can see the functions of FDI in various sectors which provide support to all
sector by providing available resources the companies have.

10. 1. FDI in Insurance Sector
• The Indian Cabinet Committee on Economic Affairs (CCEA) is strongly expected to
raise the FDI ceiling in the Insurance and Pension sectors.
• FDI threshold to 49% in the Insurance sector from the existing limit of 26%, has been
submitted to the cabinet for proper approval in the quickest possible period.
• Increment in the FDI ceiling in the insurance sector of India, will certainly be highly and
greatly appreciated by domestic and foreign insurance companies, for the purpose of
expanding and enriching their insurance and re-insurance businesses.

11. 2. Pension
• The proposal to allow foreign direct investment, or FDI, in the pension space
has to clear the parliamentary hurdle before pension funds become a reality in
the country where more and more people are working in private sector
enterprises that do not offer a pension after retirement.
• "What the pension reforms will do is attract more money and help the
companies sustain their businesses over a long period of time, which is key for
the sector.

12. 3. FDI in Broadcasting Sector
• Liberalize the Broadcasting sector of India to foreign direct investment, the Indian
Cabinet Committee on Economic Affairs (CCEA) raised the FDI cap from 49% to 74%
many fields of the Broadcasting sector . CCEA opted to retain the existing cap of 26% in
the fields of TV News Channels and the FM Radio.
• The recent governmental decision will be applied to the following Broadcast Carriage
Service Providers.
• Teleports (Up-linking HUBs/Teleports)
• Direct-to Home (DTH)
• Head-end in the Sky (HITS)
• Cable Networks (Multi-Service Operators who undertake up-gradation of networks for
digitalization and addressability)
• Mobile TVs

13. 4.FDI in Broadcasting Sector
• The latest visionary decision of the Government of India to allow FDI
up to 49% in India's domestic aviation, is expected to heal the cash-
strapped aviation industry of India, and attract massive foreign direct
investment in the aviation sector of India, in short and long future.
• The aviation sector of India has been serving about 100 million
aviation travellers every year, both international and domestic markets,
in the recent years.

14. CNTD……..
• According to RNCOS Report, India is one among the top ten largest markets of
the world, in respect of aviation, and is growing tremendously.
• The domestic aviation market of India will emerge out as the third biggest
domestic aviation market in the entire world by 2020 with over 450 million
domestic passengers.

15. SOME EXAMPLES OF FDI
1. BP Plc is making one of the biggest foreign direct investments (FDI) in India, with
a $7.2 billion tie-up with Reliance Industries to explore for deepwater oil and gas.
BP will take a 30 percent stake in 23 oil and gas blocks and form a 50:50 joint
venture with Reliance for the sourcing and marketing of gas.
2. Vodafone entered India in 2007, paying $11.1 billion to buy a 67 percent
controlling stake in Hutchison Whampoa Ltd's mobile business in India, in which
India's Essar Group is a partner. The deal is the largest inbound foreign direct
investment to be completed.

16. CNTD………
• Japanese drug maker Daiichi Sankyo paid up to $4.6 billion in 2008 for control of
India's Ranbaxy Laboratories Ltd.

17. CONCLUSION
• FDI plays very important role in the development of economy of any country. In
India after the implementation of LPG policy 1991 the concept of FDI came into
existence the purpose is to increase the growth rate of economy and also helpful
in increasing the national income & per capita income.