Foreign Direct Investment

What is Foreign
direct Investment?
A foreign direct investment (FDI) is an
investment in the form of a controlling
ownership in a business, in real estate or in
productive assets such as factories in one
country by an entity based in another country.

It is thus distinguished from a foreign portfolio

investment or foreign indirect investment by a
notion of direct control.
 Pros of
Foreign Direct Investment
Diversifies pROMOTES lONG term Provides finance to Technology to
Investor Portfolio Lending developing countries developing Countries
 cons of
Foreign Direct Investment
NOT SUITABLE STRATEGICALLY Investors may have less unethical access to
FOR IMPORTANT INDUSTRIES more attachment local markets
 TYPES OF FDI

H V C P
Horizontal Vertical Conglomerate Platform
In this business In this business In this business In this business
expands its inland expands into another undertakes unrelated expands into another
operations to another country by moving to a business activities in a country but the output
country to undertake different level of the foreign country. from the business is
same activities . supply chain. then exported to a
third country.
Foreign Direct
Investment
(As per Indian Context)
 Top 5 FDI Sourcing
Nation

27% 17.9% 16% 7.9% 7.3%

SINGAPORE USA MAURITIUS NETHERLAND SWITZERLAND

 Top 5 Sectors

24.6% 12.1% 11.9% 7.7% 5.5%

SOFTWARE SERVICE AUTOMOBILE TRADING CONSTRUCTION

THANK
YOU.