FOREIGN DIRECT INTVESTMENT

PRESENTED BY: ABID BEAUTI VICTORIA ANILKUMAR

CONTENTS
Definition Classification of Fdi Benefits of Fdi Disadvantages of Fdi Determinants of Fdi FDI policies Strategies for foreign investor Strategies for Indian investors Data regarding current Fdi policy 

DEFINITION
Investment is “the flow of funds one

destination to another”, for any activity, including industrial development, infrastructure and manufacturing.
 It is the establishment of an enterprise by a

foreigner.

 Its definition can be extended to include

investments made to acquire lasting interest in enterprises operating outside of the economy of the investor.

CLASSIFICATON OF FDI
 Broadly classified broadly classified into two types:
 

OUTWARD FDIS INWARD FDIS

 An outward-bound FDI is backed by the 

government against all types of associated risks.

 Factors encourage inward FDIs include interest

loans, tax breaks, grants, subsidies, and the removal of restrictions and limitations.

BENEFITS OF FDI
Capital Technology Market access Increase in domestic investment Export promotion Generating employment Infrastructure Social effects Spillover   

DISADAVANTAGES OF FDI
Inconvenienced when negatively affected The defense of a country has faced risks Not appreciated by the workers of the recipient

country A company may lose out on its ownership to an overseas company Governments of the host country are facing problems with foreign direct investment

DETERMINANATS OF FDI
Growth prospects of the economy of the

country Population of a country plays an important role Human resources in a country Inexpensive labor force Infrastructural factors Transparency of the legal frameworks Dimensions of the host country High per capita income

FDI POLICIES
 Two broad objectives

to promote the investment opportunities to the overseas investors Ø strike a balance between the overseas and local investors. Ø

 SALIENT FEATURES Ø Agriculture and plantations plantations Ø Real estate business Ø Retail trade in any form Ø Security services

excluding

tea

STRATIGIES FOR FOREIGN INVESTORS TO INVEST IN INDIA

CONTD…

STRATEGIES FOR INDIAN INVESTORS TO INVEST IN FOREIGN

STATISTICS

FDI COMPARISON

Ranks

SHARE OF TOP INVESTING COUNTRIES FDI EQUITY INFLOWS
Country
MAURITIUS U.S.A. SINGAPORE U.K. NETHERLAN DS JAPAN GERMANY

2008 - 09 ( for April 2008 )
5,183 ( 1 , 295 ) 799 ( 200 ) 1,653 ( 413 ) 190 ( 48 ) 18 (4) 59 ( 15 ) 202 ( 50 )

Cumulative % age with Inflows ( Apri total l 00 - April Inflows 09 )
115,556 ( 26 , 930 ) 20,757 ( 4 , 733 ) 19,778 ( 4 , 770 ) 19,254 ( 4 , 410 ) 11,939 ( 2 , 709 ) 9,395 ( 2 , 141 ) 6,940 ( 1 , 594 ) 44 . 26 % 7 . 95 % 7 . 58 % 7 . 38 % 4 . 57 % 3 . 60 % 2 . 66 %

1 2 3 4 5 6 7

STEPS TO ATTRACT FDI
 Political stability and a strong policy to protect

investors  Safety and security  Investment protection through legal provisions  Proactive government policies  Continuous infrastructural development  Banking system with updated technology  High productivity of the labour force  Availability of raw material, components and consumables  Ample potential opportunities for products in the neighboring countries.

THANK YOU

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