FOREIGN

DIRECT
INVESTMENT
IN INDIA
 FOREIGN DIRECT INVESTMENT?

Foreign direct investment (FDI) is

an investment made by a
company or individual in one
country in business interests in
another country, in the form of
either establishing business
operations or acquiring business
assets in the other country.
 REASONS FOR FDI

 Resource for economic growth

 Business growth in several countries
 FDI & Economic development
 Rise in National income
 Money inflow from overseas
ADVANTAGES OF FDI
 Creation of jobs
 Implementation of new
technology
 Increase the number of
competition
 Expand local business
 Improve political relations
 Get additional expertise
 WHY FDI IS IMPORTANT FOR
INDIA?
India is the
 4th fastest growing economy
 7.2% GDP growth
 6th largest economy in the world
 ECONOMY OF INDIA
 The economy of India is
the sixth-largest in the world
measured by nominal GDP and
the third-largest by purchasing
power parity (PPP). The country
is classified as a newly
industrialised country, and one
of the G-20 major economies,
with an average growth rate of
approximately 7% over the last
two decades.
FDI IN INDIA
 Foreign direct Investment (FDI)
in India is the major monetary
source for economic
development in India. Foreign
companies invest directly in
fast growing private Indian
businesses to take benefits of
cheaper wages and changing
business environment of India.
GOVERMENT INITIATIVES
 The Government of
India has amended FDI
policy to increase FDI
inflow. In 2014, the
government increased
foreign investment
upper limit from 26% to
49% in insurance sector.
 MAKE IN INDIA
 Make in India is an initiative launched by
the Government of India to encourage national,
as well as multi-national companies to
manufacture their products in India. It was
launched by Prime Minister Narendra Modi on 25
September 2014.
SECTORS
Make in India focuses on the following sectors of the economy:
Investments
Recent significant FDI announcements:
 SoftBank is planning to invest its new US$ 100
billion technology fund in market leaders in
each market segment in India

 Walmart, plans to open 50 new cash-and-carry

stores in India while creating over 40,000 jobs in
the two states.

 AppleInc has started its first development

centre outside the US in Hyderabad, which will
employ over 4,000 people.
 Principal sectors to invest
• By 2026, India is expected to
be the third largest automotive
CONSTRUCTION
market by volume in the world.

• India registered 8.03 million foreign tourist

TOURISM AND arrivals in 2015, registering an annual growth
HOSPITALITY of 4.5% over the previous year

• India is one of the fastest growing

AVIATION
aviation markets and currently the
ninth largest civil aviation market in
the world.

• Construction sector in India will

CONSTRUCTION remain buoyant due to increased
demand from real estate and
infrastructure projects.
Advantages
There are several benefits of increasing foreign direct
investment in India as:
 CONSUMERS. With more FDI, it will be able to save
5 to 10% on expenses. Win-win situation for buyers.

 FARMERS. Who face economics problems will get

better payment for their produce. Earnings will
increase by 10 to 30%.

 EMPLOYMENT. Positive effects by generating 4

million job opportunities.

 THE GOVERNMENTS (central and state). Expected

benefit with addition of $25-30 billion to the
national treasury.
 http://www.investopedia.com/terms/f/fdi.
asp
 http://business.mapsofindia.com/fdi-
india/