CIA 3 (Component 2)

Motives & Implications of Foreign Trade and FDI policy

promotion in India
ARYAN GARG (19212016)
BBA-A
FOREIGN TRADE
• Foreign trade is the buying and selling of products and services in
foreign markets. This activity increases consumer choice, creating
competitive markets that should result in reduced end prices and
increased quality of products and services.
FOREIGN DIRECT INVESTMENT (FDI)
• A foreign direct investment involves a company or individual based in one
country investing business interests in another country. These investments
are typically in foreign business operations or assets, rather than buying
and selling equities that are considered portfolio investments.
Motive of promotion of foreign trade by the government
• Division of labor and specialization at the global level.
• More efficient use of resources.
• Earning of Foreign Exchange.
• Increased Standard of Living.
Implication of foreign trade policy (2015-2020) on the
Indian economy
• FTP 2015-20 introduces two new schemes:
• ‘Merchandise Exports from India Scheme (MEIS)’ for export of specified goods to
specified markets.
• ‘Services Exports from India Scheme (SEIS)’ for increasing exports of notified services.
Motives of FDI policy promotion of the government
• Increased Employment and Economic Growth
• Human Resource Development
• Development of Backward Areas
• Increase in Exports
• Exchange Rate Stability
Implication of FDI policy in the Indian economy
• Positive impact
• Essential for enhancing the domestic capital, productivity along with the employment
rate.
• Increasing the ratio of total employment
• Improvement in infrastructure, as well as the financial services.
• Accelerating the economic development.
THANK YOU