FDI IS A BOON OR BANE FOR INDIAN ECONOMY

The Foreign Direct Investment means cross border investment made by a resident in one economy in an enterprise in another economy, with the objective of establishing a lasting interest in the investee economy. FDI is also described as investment into the business of a country by a company in another country. Mostly the investment is into production by either buying a company in the target country or by expanding operations of an existing business in that country. Such investments can take place for many reasons, including to take advantage of cheaper wages, special investment privileges (e.g. tax exemptions) offered by the country.

FORMS OF FDI
Purchasing of assets in a foreign country

New investment in property, plant and equipment

Participation in a joint venture with a local partner Transfer of many types of assets like human

resource, systems, etc

Through trading in equity

PRE-LIBERALIZATION PERIOD:

Extremely cautious and selective approach Welcomed in high technology and highly prioritized areas FERA is the regulating authority In 1973 foreign equity holding in joint venture is limited to 40% Government established the SEZs and designed liberalized policies +incentives for promoting FDI Partial liberalization and investment policies are introduced in 1980 Industrial policy 1980 and 1982 ,technology policy 1983 created a liberal attitude towards FDI

POST LIBERALIZATION PERIOD:

It came into existence in the year 1991
Helped to integrate with the global economy Gradually removed trade restrictions

FERA is replaced by FEMA in the year 1999

They introduced dual route of entry

-automatic route -government route

Percentage of FDI permitted in INDIA: 51% permitted in

0% permitted in
Agriculture (except Tea)

Housing and real estate [except NRI] Lottery, Gambling 26% permitted in Defense Insurance Newspaper and media Petroleum refining 49% permitted in Banking Cable network DTH Infrastructure investment Telecom

Single Brand Retail Now 100% FDI permitted in Single Brand. Petro-pipelines 74% permitted in Atomic minerals Science Magazines /Journals Petro marketing Coal and Lignite mines Telecom

100% permitted in
Single Brand Retail

Advertisement Airports Cold-storage BPO/Call centers E-commerce Energy (except atomic) export trading house

Films Hotel, tourism Metro train Mines (gold, silver) Petroleum exploration Pharmaceuticals Pollution control Postal service Roads, highways, ports. Township

SECTORIAL DIVISION OF FDI IN INDIA

RETAILING

ORGANISED RETAILING

UN ORGANISED RETAILING

BENEFITS OF FDI :
(a) Improves forex position of the country; (b) Employment generation and increase in production ; (c) Help in capital formation by bringing fresh capital; (d) Helps in transfer of new technologies, management skills, intellectual property (e) Increases competition within the local market and this brings higher efficiencies (f) Helps in increasing exports; (g) Increases tax revenues

DISADVANTAGES OF FDI :

(a) Domestic companies fear that they may lose their ownership to overseas company (b) Small enterprises fear that they may not be able to compete with world class large companies and may ultimately be edged out of business; (c) Large giants of the world try to monopolise and take over the highly profitable sectors; (d) Such foreign companies invest more in machinery and intellectual property than in wages of the local people; (e) Government has less control over the functioning of such companies as they usually work as wholly owned subsidiary of an overseas company;

DISCUSSION
Impact on Mom-and-Pop Retailers Supply Footprint: Traders -- Not Farmers

Beware
Other Impacts

INFLOW OF FDI IN INDIA FROM 2000-2012

S. No Financial Year (April March) %age growth over Amount of FDI previous year (in terms of Inflows US $)
In In US$ Rs, crores million 1 2 3 4 5 2000-01 2001-02 2002-03 2003-04 2004-05 10733 18654 12871 10064 14653 2463 4065 2705 2188 3219 ( + ) 65 % ( - ) 33 % ( - ) 19 % ( + ) 47 %

6
7 8 9 10 11 12

2005-06
2006-07 2007-08 2008-09 * 2009-10 # 2010-11 # 2011-12 # (April - January 2012)

24584
56390 98642 142829 123120 88520 122307

5540
12492 24575 31396 25834 19427 26192

( + ) 72 %
(+ )125 % ( + ) 97 % ( + ) 28 % ( - ) 18 % ( - ) 25 % -

PRESENCE OF FDI AROUND US

SOFTWARE AND COMMUNICATION

COCA COLA

AND PEPSI

RESTAURENTS

FOOT WEARS

ONLINE SHOPPING MALLS

CHOCOLATES

OTHER FAMOUS BRANDS

CONCLUSION:
when there change there is resistance so we must over come it except the wet babies no one is interested to change -prof.henry ford