Gaurish Dhareshwar 16

Haris Siddiq 17
Helley Rao 18
Henal Mehta 19
Hrushikesh Vartak 20
Rohit Raghuvanshi 39
Romin Vaghasia 40
Ronak Shah 41
Sandeep Jain 42
Sandhya Yadav 43
 Any form of investment that earns interest in
enterprises
 Function outside of the domestic territory of
the investor.
 Criteria For Company to be considered FDI:
 10% or more ordinary shares in foreign enterprise
 Voting rights in the foreign enterprise.
 By Direction By Target By Motive

• Inward • Greenfield • Resource

• Outward Investment seeking
• Horizontal • Mergers & • Market
• Vertical Acquisitions seeking
• Backward • Efficiency
seeking
• Forward
• Strategic –
Asset seeking
 Inward
 When foreign capital is invested in local resources.
 Outward
 When local capital is invested in foreign resources.
 Horizontal
 enters a foreign country to produce the same
products product at home.
 Vertical
 Forward
 Backward
 Greenfeild FDIs
 Mergers and Acquisitions
 Cross-border Acquisitions
 Resource seeking
 Factors of production.
 Market seeking
 Aims at penetrating new markets
 Maintaining existing markets
 Efficiency seeking
 Increase efficiency by exploiting benefits of large
Scale and Scope.
 Strategic Asset seeking
 Tactical investment to prevent future loss.
 Automatic Routes
 New Ventures
 Existing Companies

 Government Routes
 FIPB
 FIPB
 Quickly approve

 Look over the implementation

 Encourage FDI

 Identify sectors that require FDI

 Establish transparency
 FIPB Territories
 Petroleum sector
 Existing Airport Projects
 Atomic Minerals
 Broadcasting
 Defense
 Print Media
 Satellite Establishment
 Forbidden Territories
 Retail
 Atomic Energy
 Lottery Business
 Gambling and Betting
Economic reforms
 Fuels (Power & Oil Ref.) (35.93%)
 Telecommunications (radio paging, cellular mobile & basic
telephone services (10.56%)
 Electrical Equipment (including Computer Software & Electronics)
(9.50%)
 Food Processing Industries (Food products & marine products)
(9.43%)
 Service Sector (Fin. & Non-Fin. Services) (8.28%)
 Foreign direct investment (FDI) from the United States is expected
to exceed $1 billion
 Reluctance for FDI until 1990’s

 In 2004, FDI reached to US $60.6 billion

 China approved 16,437 new foreign-invested

ventures in the next year

 Current Chinese investment is considered to

be more by 10 times than that of India
 Data dissemination
 Debt securities
 Direct Investment
 Direct investment Enterprise
 Direct investment income
 Direct Investor
 Inward/ Outward flow
 Non voting stocks
• The FDI in India in telecom has been hiked up
from 49% to 74%.
• This move is positive , as it require investments
of Rs 700 –900 million over the next 5 years.
• Countries like Europe, Korea, and Japan telecom
are likely to enter India, as India is seen as fastest
growing telecom market in world.
• FDI inflow in India in this sector was nearly
9950.94 crores.
 Tele communication facility at reasonable price, affordable
to many.

 FDI inflows will allow multiple benefits such as technology

transfer, market access and organizational skills.

 In India where 70% of population still resides in rural areas,

there is a dire need of infrastructure in telecom, which FDI
can provide.

 Foreign currency flowing in the country.

 There will be increase in competition with local players,

which will benefit consumers.
 Majority Directors on the board have to be Resident
Indian citizen(CEO,MD) etc.

 Telecom firms "must provide traceable identity of

their subscribers".

 Companies cannot provide any accounting

information relating to subscribers to anyone outside
the country.

 Telecom network cannot be managed from the

overseas and the network should be in India.
Virgin Mobile –
TataTelecom
 Richard Branson’s Virgin Mobile tried to enter
Indian market through a 50:50 joint venture with
the Tata’s.

 Virgin will exclusively license the Virgin Mobile

brand and technology expertise in the area of
value-added services (VAS) and handsets to TTSL
and they largely targeted at the youth segment.
 They also started for recruiting people for
different positions.

 The company is the world’s first mobile

virtual network operator (MVNO).

 It does not maintain its own network and

instead has contracts to use the existing
networks of other providers, on which it
offers services under the Virgin brand.
 MVNOs are not yet permitted in India, though
telecom regulator TRAI.

 Instead, it will be an agent of TTSL and Virgin

Mobile-branded services will be available over
TTSL’s network.
 Now in India the Virgin Group has a technical
and consultancy services agreement with
Essar Telecom Retail, the retail venture of the
Ruias.

 Under this agreement, the Virgin group is

providing its expertise in the areas of
branding, marketing, customer care, store
operations and staff training to Essar stores.
• Franchising (Nike, addidas)

• Whole selling (Wal-Mart)

• Licensing

• Setting manufacturing base

• The unorganized retail sector as has been mentioned
earlier occupies 98% of the retail sector and the rest
2% is contributed by the organized sector

• Hence one reason why the government was fearing

the surge of the Foreign Direct Investments in India
was the displacement of labour.

• The unorganized retail sector contributes about 14%

to the GDP and absorbs about 7% of our labour force
• Fastest growing industry.

• Expected to be the next boom after IT sector.

• 100% FDI in cash-and-carry wholesale

• 51% FDI is permitted in single brand retailing

• Total retail market in India - $35.3 billion in
2008.

• Organised retail sector – 7% is projected to

grow at 40% p.a.

• Largest sector – 10% GDP and 8% of

employment.
 Corporate houses  Dedicated brand
outlets
 Tatas : TATA Trent,
 RPG group : Food world  Nike, Reebok, Zodiac,etc
, Health and glow  Multi brand outlets
 ITC : Wills Lifestyle  Vijay Sales , Viveks, etc.
Group  Manufactures/
 Rahejas: Shoppers stop exporters –
 Hiranandani : Haiko Pantaloons, Bata,
Weekender.
• FDI brings competition in organized sector of retail market and
competition bring low cost product for consumers. But as the coin
has two sides FDI also has a bad impact on unorganized sectors

• The 97% of total retail market of India is unorganized, millions of

people livelihood depends on that and more and more number of
FDI will generate more and more unemployment in India.

• Because of FDI and major players entering infrastructure, real-

estate and entertainment sector has been boomed providing
millions of jobs.
• Bharti Wal-Mart Private Limited, a joint venture for wholesale
cash- and-carry and back-end supply chain management
operations in India

• Under the agreement, Bharti and Wal-Mart will hold a 50:50 stake
in Bharti Wal-Mart Private Limited.

• The Bharti Wal-Mart business-to-business (B2B) wholesale cash-

and-carry joint venture will serve kirana stores, fruit and vegetable
resellers, restaurants.

• It also will serve other retailers such as Bharti Retail, which is

setting up a chain of stores in India that are 100 percent owned
and operated by Bharti.
• The supply chain will link farmers and retailers directly who have limited
infrastructure and distribution strength.
• And the supply chain will enable minimum wastage, particularly of fresh
foods and vegetables.
• The venture is expected to open 10 to 15 wholesale cash-and-carry
facilities and employ approximately 5,000
• A typical facility will stand between 50,000 and 100,000 square feet and
sell a wide range of fruits and vegetables, groceries and staples,
stationery, footwear, clothing, consumer durables and other general
merchandise items.
• Wal-Mart joint venture face the problems due to the opposition by the
Left parties
• They insisted that the government should look into
the matter to stop the "backdoor entry" of Wal-Mart
into India.

• These parties opposed the joint venture stating that

foreign direct investment in retail trade was not
allowed under the existing policy.

• And that it would impact the vast number of

unorganized retailers, domestic manufacturers, and
farmers in India and unemployment.