Foreign Direct

Investment
Submitted By:
chandana T.k
Prathyusha T
 INDIAN ECONOMY OVERVIEW
 INDIA ranks third in the world in terms of
financial attractiveness, people and skills
availability and business environment.
 Country's financial stability in the current
environment of financial turbulence and a
possible unwinding  of macro imbalances
sends clear message to the prospective
foreign investors about India's position as
an expanding investment destination.
 "India's external sector has displayed considerable strength and
resilience since the reforms in 1991- despite several domestic
as well as global political events and supply shocks in food and
fuel. we partner with the global economy fully on the trade and
current account while there is progressive liberalisation of the
capital account, consistent with the progress in reforms in the
real, fiscal and financial sectors. . "The strong macro economic
fundamentals, growing size of the economy and improving
investment climate has attracted global corporation to invest in
India. A major outcome of the economic reforms process aimed
at opening up the economy and embracing globalization has
led to to tremendous  increase in Foreign Direct Investment
inflows into India", says country's powerful industry lobby CII.
REASONS FOR FOREIGN INVESTMENT IN INDIA
•Political stability & strong policy to protect investors
• Safety & security of life, money & output
• Investment protection through legal provisions
• Continuous infrastructure development
• A banking system with up – to – date technology
• A highly productive labor & smooth working conditions
• Clear & simple tax procedures
• Availability of raw materials & other components
The demand for the products that investors
manufactures
 FOREIGN DIRECT INVESTMENT
Foreign Direct Investment (FDI) means a company or any
other entity in one country making a physical investment in other
country.

FDI includes investments made to acquire a lasting interest in

enterprises that are operating outside the economy & national
borders of an investor.

FDI (for a country) represents foreign assets in domestic

Structures, equipments & organizations.
 BENEFTS OF FDI
 INFLOW OF CAPITAL IN HOME COUNTRY
 REPATRIATION OF PROFITS BY INVESTOR
 TECHNOLOGY DEVELOPMENT & TRANSFER
 TRANSFER OF KNOWLEDGE
 ACCESS TO NEW MARKETS
 FDI LED EXPORT GROWTH
 EMPLOYMENT GENERATION
 INFRASTRUCTURE DEVELOPMENT IN HOME COUNTRY
 LEADS TO LIBERALIZATION & GLOBALIZATION
SECTORS ATTRACTING HIGHEST FDI INFLOWS
 FDI IN
INFRASTRUCTURE SECTOR
Inflow of FDI in the infrastructure sector has brought about a host of
changes in the industry, including an end to large number of
government regulations of innovative schemes of financing
infrastructure projects.

India is now the third most favoured destination for FDI, behind China
and USA.

A proactive approach is even been seen on behalf of the government.

Allowing 100% FDI in infrastructure sector is just one of the
reformed policy changes that we have been witness to.
 REASONS TO ATTRACT FDI IN
INFRASTRUCTURE
 India’s infrastructure is alive and well and is adequate to the
previously slow growing economy. Government alone is not
capable to finance, let alone building it and successfully running it.
 FDI as source of cash and foreign technical know how with their
participation IS must for the growth of infrastructure in India.
 Overall investment plan for this sector is being drawn up by the
government’s planning body. It includes participation of central &
state governments together with the private sector. . The latter is
expected to fund and manage about 20% of the overall
investment and projects so more of FDI can be attracted towards
the private sector.
 India has recognized that without proper infrastructure
there is no possibility of making rapid strides on the
economic front so there a need to attract FDI in this sector.

 Another critical issue is that of making people pay for

using infrastructure services. BOT based road development is
one such example. This is the biggest challenge as far as the
viability of projects is concerned, as in this case, public
attitude has to be changed. In order to make efficient uses of
critical utilities like electricity and water supplies, these need
to be priced as per the cost of providing these services and
not as per political compulsions (provision of free electricity is
an example). This can prove to be the biggest attraction for
FDI participation.
 Conclusion For Infrastructure
As can be seen from the recent initiatives of India Inc
and government, we surely are moving in the
direction of emerging as an economic power in Asia.
However, while there might be speed breakers in
the way, a world class infrastructure set up can take
care of the same. In India, we surely are living in
one of the most exciting times ever. Time is
changing! In fact, there is no other option. Time
has to change and so is India. infrastructure in
India.
 FDI in Health Sector
 Overall, if one were to take the survey results as reflecting the way in
which foreign funded hospitals function compare to non-foreign funded
hospitals, and thus the kind of impact they are likely to have on the health
sector, then several insights emerge.
 *such hospitals are likely to focus on more advanced procedures and
speciality areas.
 *they are likely to employ a higher ratio of technology to personnel in their
health care delivery and thus involve a substitution of human resources
with technology and equipment.
 *they are likely to invest much more in medical equipment and devices and
also in specialised and experienced medical personnel,thus involving a
focus high-end human resources and low-end technology.
 *such hospitals tend to have better systems and processes and wage of IT
which creates more efficient and professional work environment.
 *foreign funded hospitals pay higher rates to staff at all levels and
particularly to senior medical personal.
 *they are more likely to attract over-seas doctors and specialists than
other hospitals.
 *foreign funded hospitals could draw any medical personal at all levels
from other hospitals(both large non-foreign funded and medium and
small size hospitals/nursing homes and public sector hospitals) and could
adversely impact the quality of medical man power available to
competing institution.
 *there is lightly to closure of substandard institutions, some consolidation
of the hospital segment, and new kind of arrangement could emerge
between larger and smaller players as the health care sector involves.
 Conclusion
Strengthen the public care system in amending certain regulation
While there are clearly concerns about the equity, affordability and
market segmentation, implications of growing foreign investors
presence in India’s hospital segment, it is evident that the root cause
lies in structural problems that are already present in the health care
sectors, such as lack of affordable health insurance schemes or
inappropriate regulations on medical education providers. foreign
investment and greater corporate presence in hospital could
aggravate such structural problems systems. The inside obtained
from the discussions with stake holders suggest that the solution lies
inthat affect all players and in introducing schemes, which provide
affordable access to health care for all and not in restricting foreign
investment, the benefits of foreign investment in hospitals are likely
to out weigh these adverse affects.