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F.D.

I
(Foreign direct investment)

WHAT IS F.D.I

Benefits to consumer
A llow in g FD I w i ll in crea se com p et it ion in
t h e m a r ket w h ich ca n force d om est ic con su m ers to im p rove t h eir efficien cy a n d p rod u ct ivit y a n d t h u s lower in g p r ices. A ver y evid ent fa ct is t h at t h e m od er n izat ion of d ifferent sectors h a s evin ced a lot of interest of t h e foreig n investors a n d h a s att ra cted m a ssive FD I inf lows in t h e n ea r p a st .

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T h is in t u r n h a s gen erated lot of


em p loym ent op p or t u n it ies in t h e econ omy. C on su m ers n ow h ave a w id e va r iet y of b ra n d s a n d p rod u ct categor ies to ch oose from w h ich h a s m a d e sh op p in g ex p er ien ces of inter n at ion a l q u a lit y. It w ill a lso h elp focu s n t h e ser vice q u a lit y like con sisten cy, sta n d a rd izat ion , p r icin g , p re-sa les a ct ivit y, after sa les ser vices etc.

Benefits for producer


A S I G N I F I C A N T M A R K E T S H I F T TO T H E O R G A N I Z E D S E C TO R W I L L H E L P TO R E D U C E T H E P R O D U C E R ' S PROBLEM OF COUNTERFEIT PRODUCTS. C O N S U M E R F I N A N C I N G S C H E M E S P R O V I D E D BY T H E R E TA I L E R S H E L P T H E P R O D U C E R ' S TO O. C O N G R E G AT I O N O F L A R G E N U M B E R O F C U S TO M E R S UNDER ONE ROOF WILL BOOST LOW COST M A R K E T I N G C A M PA I G N S A N D T H U S M I N I M I Z I N G ADVERTISING COSTS. T H I S W I L L E N H A N C E T H E C H A N N E L F E E D B A C K TO T H E M A N U FA C T U R E R S T H U S H E L P I N G TO F O R M U L AT E B E T T E R B U S I N E S S S T R AT E G I E S

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By esta b lish in g a rea l t im e n et wor k w it h t h e reta ilers, t h e p rod u cers ca n cra sh t h eir su p p ly ch a in a n d m in im ize t h e inventor y h old in g cost , resp on se t im e to m a r ket d em a n d s resu lt in g in econ om ic b en efit s w h ich h ave a fin a l b en efit for t h e p rod u cers a s well a s con su m ers. In d ia n p rod u cers w i ll get a n op p or t u n it y of sh owca sin g t h eir p rod u ce in t h e inter n at ion a l m a r ket s a n d foreig n reta ilers.

Benefits for economy


In t h e era of M&A s h a p p en in g g lob a lly,
rest r u ct u r in g is a sine qua non for p rosp er it y a n d su r viva l in t h e m id st of g lob a l com p et it iven ess. Post p on in g FD I in t h is sector w i ll on ly h elp t h e u n orga n ized sector to f lou r ish p u llin g in a lm ost Rs. 110, 0 00 crore from t h e m on ey m a r ket . T h e r isk elem ent ca n b e h ed ged a n d ea sily a r b it ra ged , if t h e FD I is a llowed .

FDI INFLOW IN INDIA