Foreign Investment In INDIA Foreign Direct
Author : debby-jeon | Published Date : 2025-06-23
Description: Foreign Investment In INDIA Foreign Direct Investment FDI What is FDI Why we need FDI Process of the Inflow of FDI Benefits Types Advantages and disadvantages FII Diff between FII and FDI Modes of FDI 1 By Direction Inward Outward 2
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Transcript:Foreign Investment In INDIA Foreign Direct:
Foreign Investment In INDIA Foreign Direct Investment (FDI) What is FDI Why we need FDI Process of the Inflow of FDI Benefits Types Advantages and disadvantages FII Diff between FII and FDI Modes of FDI 1) By Direction * Inward *Outward 2) By Target * Mergers and Acquisitions * Horizontal FDI * Vertical FDI (a) Backward Vertical FDI (b) Forward Vertical FDI 3 )By Motive * Resource-Seeking * Market-Seeking * Efficiency-Seeking Factors Affecting FDI Financial incentives (Funds from local Government) Fiscal incentives (Exemption from import duties) Indirect incentives (Provides land and Political stability Market potential & accessibility Large economy Market size Why India? Liberal, largest democracy, Political Stability Second largest emerging market (US$ 2.4 trillion) Skilled and competitive labors force highest rates of return on investment one hundred of the Fortune 500 have R & D facilities in India Second largest group of software developers after the U.S. lists 6,500 companies on the Bombay Stock Exchange (only the NYSE has more) Why India (cont.) World's fourth largest economy & second largest pharmaceutical industry growth over the past few years averaging 8% has a middle class estimated at 300 million out of a total population of 1 billion Destination for business process outsourcing, Knowledge processing etc. Second largest English-speaking, scientific, technical and executive manpower Low costs & Tax exemptions in SEZ Tax incentives for IT , business process outsourcing and KPO companies Government policies Automatic Route Prior Permission (FIPB) Investing in India – Entry Routes Investing in India Automatic Route Prior Permission (FIPB) General rule No prior permission required Only information to the Reserve Bank of India within 30 days of inflow/ Issue of shares By exception Prior Government Approval needed Decision generally Within 4-6 weeks FDI Investment Sectors Prohibited activities Atomic energy Arms and ammunition Lottery business Betting and Gambling Aircraft and warships Coal lignite Fully permitted Activities Cigar and cigarettes of tobacco Coal, Roads & Highways Diamond, Gold, Silver , Minerals Atomic minerals Electricity Hotel, hospitals Retail I.T Oil & Energy Power sector Pharmaceuticals & Chemicals Real state Mining Mobile Sector Automobile Telecommunication FDI inflows In real estate US$ 5 Billion FDI inflows Retail US$ 20 Billion by 2010 FDI inflows in Mining US$ 2,5 Billion per N.M. FDI inflows in Telecommunication US$ 24 Billion Major Investments What is an FII?? An institution established outside India, which invests in securities traded on the markets in India e.g. Pension Funds
