DISSERTATION REPORT Role of FDI in Development of Economy

BY: HIMANI MAHESHWARI A3906410122 B-03

WHAT IS FDI ?
Foreign direct investment is an investment made by a foreign individual or company in productive capacity of another country. It is the movement of capital across national frontiers in a way that grants the investor control over the acquired asset.

TYPES : * Greenfield investment: It is the direct investment in

new facilities or the expansion of existing facilities. It is the principal mode of investing in developing countries like India.

* Mergers and Acquisition: It occurs when a transfer

of existing assets from local firms takes place

 The Indian economy is that the third largest within the world as measured by Purchasing Power Parity, with a gross domestic product people $1.85 trillion. India is that the second quickest growing major economy within the world, with a GDP growth rate of 6.5% for the year 2011.
According to the Asian Investment Intentions survey released by the Asia Pacific Foundation in Canada, more Canadian firms are now focusing on India as an investment destination as there has been an increase from 8 per cent in 2005, up to 13.4 per cent in 2010 in India. India has attracted FDI equity inflows of virtually US$ 2,014 million in Dec 2010. The accumulative quantity of FDI equity inflows since April 2000 to Dec 2010 has stood up at US$ 186.79 billion, as per the information discharged by the Department of business Policy and Promotion (DIPP).

Made in China is not Made by China

China doesn't have a developed entrepreneurial category like India and, hence, it's obsessed on the foreign capitalists and foreign capital compared to India, that encompasses a burgeoning entrepreneurial category, created in China isn't same as created by China.

6000 5000 4000 US $ million 3000 2000 1000 0

2% 4% 4% 3%

2%

Mauritius

5%
7%

Singapore
USA UK

9%

Netherlands Japan

11% 53%

Cyprus
Germany UAE France

Services Sector 6% 6% 4% 4% 3% Computer Software & hardware Telecommunications Housing & real Estate 10% Construction Activities 31% Power Automobile Industry Metallurgical Industries 12% 13% Petroleum & Natural Gas Chemicals

11%

 Ranked 2nd most favored destination for foreign investments after China India ranks among the top 12 producers of manufacturing value added (MVA). In textiles, the country is ranked 4th after China, USA and Italy. In electrical machinery and apparatus, it is ranked 5th.

According to a United Nations Industrial Development Organization (UNIDO) analysis based on 2007 figures mentioned in the International Yearbook of Industrial Statistics 2009

Foreign Direct Investment (FDI) up to 100% is permitted in all manufacturing activities except:Where more than 24% foreign equity is proposed to be inducted for manufacture of items reserve d for Small Scale sector

Defense Industry

Cigars & Cigarette manufacturin g

Where the foreign investor has an existing joint venture in India in the same field.