SYNOPSIS

IMPACT OF FDI ON INDIA

INTRODUCTION

The World Trade Organisation is a living and growing organism. The functioning of
WTO affects the economic life of all countries around the globe. It is not concerned
only with international trade law but with “international business” in general and that
includes foreign direct investment (FDI). Foreign direct investment is a direct
investment into production or business in a country by an individual or company of
another country, either by buying a company in the target country or by expanding
operations of an existing business in that country. The provisions on FDI in the WTO
framework are contained in two agreements: - the General Agreement on Trade in
Services (GATS) and the Agreement on Trade-Related Investment Measures (TRIMS)
in relation to trade in goods. All forms of FDI come under the jurisdiction of WTO.

An FDI proposal requires approval. There are two approval bodies: the Reserve Bank
of India and the Secretariat for Industrial Assistance and Foreign Investment Promotion
Board. The RBI gives automatic approval to proposals in high-priority sectors where
foreign equity does not exceed 51 per cent and in the mining sector as long as it does
not exceed 50 percent. SIA/FIPB deals with other proposals, such as where foreign
equity exceed 51 percent the industry is not on the list of high-priority sectors, or foreign
equity does not cover the import of capital goods. Unlike the RBI, SIA/FIPB can initiate
and carry-on detailed negotiations with foreign firms.
 RESEARCH PLAN

The system of foreign direct investment is a smooth mechanism of investment for investors
who want to invest internationally; this not only helps the investors but benefits the nation
as well. But this investment comes with a price and this price is paid by the developing
countries and that is a tougher competition for the local market. As far as Indian consumers
are concerned, we have a mentality of assuming foreign products to be superior to local
products which makes the competition unfair as well.

RESEARCH OBJECTIVES

The researcher project’s objective is to find out the following: -

• To depict the beneficiaries gained by Indian market through FDI.

• To discuss the policies and strategies picked up by the parent and host countries.
• To find out the impact of FDI policies on India and to critically analyse the FDI
regulations.

RESEARCH QUESTIONS

• What are the FDI policies, the positive and negative incentives related to it?
• What is the relation between FDI and growth in the Indian economy?
• What are the factors which influence the flow of FDI?
 RESEARCH METHODOLOGY

The primary research methodology the researcher would be following is doctrinal. The
research is done through reading of various Books, Journals, Articles, internet reports
etc.

CHAPTERISATION

The project will comprise of the following 5 chapters: -

1. FDI POLICY IN NEW ERA

2. INVESTMENT RESTRICTIONS
3. LEGAL ISSUES ON FOREIGN INVESTMENT IN INDIA
4. INDIAN PERSPECTIVE: IMPACT OF FDI ON INDIA
5. CRITICISM OF FDI REGULATIONS.
6. CONCLUSION/ SUGGESTION