FOREIGN DIRECT INVESTMENT

IMPACT OF FDI ON ECONOMY

KRISHNA PRIYA 912 2ND SEM BCOM J

Definition Advantage of FDI Factors Influencing FDI Origin of Statistical Data Measures To Attract FDI Attracting Foreign Capital Results Encouraging Destination India

Definition of FDI
Foreign direct investment (FDI) occurs when investor based in one country (the home country) acquired an asset in other country (the host country) with the intent to manage the asset

Advantages of FDI
Infrastructure

& Technology transfer Increased productive efficiency due to competition from multinational subsidiaries

Advantages of FDI
Improvement in the quality of the factors of production Inflow in investment fund (To fill the gape..)

Advantages of FDI
Faster

growth of output employment Consumer benefits [1]Price [2] quality [3] varieties Increase in exports

and

Factors Influencing FDI This factors Influencing FDI can be divided into three sub factors. 1)Supply Factors 2)Demand Factors 3)Government Factors

Supply Factors Influencing FDI

Production Logistics Resource

costs

availability Access to technology

Demand Factors Influencing FDI

Customer Access Follow clients Follow rivals Exploitation of competitive Advantage

Govt Factors Influencing FDI

Economic

priorities Avoidance of trade barriers Economic Development incentives

Inflow of FDI in India

2007-08 ---$15.7 billion 2006-07 --- $5.5 billion Major player [1] Vodafone [2] Nokia [3] General motors [4] suzuki

Sectors [1] services [2] Electrical Equipment [3] Real state [4] Transportation

Outflow of FDI from india

2007-08$15 billion 2006-07--$2.8 billion Players [1] Tata Groups [2] Bhart forge [3] Wipro [4] Infro Sys [5] Ranbaxy

[1] [2] [3] [4] [5]

Sectors Pharmaceuticals Industrial goods, Automotive components Software Metal

Measures To Attract FDI

1992 --- Foreign firms obtained automatic rights over international brand names. 1998-- FIIs-now allowed to invest in Govt securities,listed & unlisted securities. 2000 --- 100% Foreign equity allowed in infrastructure projects- ports road,highways. 2002 ---Limited FDI in print media permitted.

How can FDI be better applied to sustainable developments?

Recommendations

Compare the Pro and the Cons Develop strategies that targets the right kind of FDI Consider the long term effects to the entire economy and the social well Use of Environmental friendly

RESULT ENCOURAGING TO FDI

THE RESULT OF ALL THESE EFFEORTS ARE ENCOURAGING . THE IN FLOW OF FOREING CAPITAL HAS BEEN STEADILY RISING FROM YEAR TO YEAR

Factors attracting foreign direct investment in Karnataka

The state government is investor friendly for it provides the facility of single window clearance to ensure fast track approvals for foreign investments. The infrastructure facility that is available in the state is of world class standard. Good law and order situation prevails in Karnataka which is conductive to foreign direct investments. The state provides excellent logistic support and connectivity to the investors The state ranks among the top 5 industrially developed states of India. The state provides to the investors one of the biggest and fastest expanding markets in the country Highly skilled manpower is abundantly available in Karnataka.

Industries attracting foreign direct investment in Karnataka are:

Information Cement Food

technology

processing industries Automobiles Pharmaceuticals Electronics & communications Apparel

Amount of foreign direct investment in Karnataka:

The

total percentage of foreign direct investment in Karnataka stood at 8% out of the total foreign direct investment in India during August 1991 to May 2000. There are more than 500 multinational companies in the Karnataka and also over 100 international R&D centers in the state.

Advantages of foreign direct investment in Karnataka:

The

advantages of foreign direct investment in Karnataka are that it has helped to generate employment opportunities for the people in the state. Further the advantages of foreign direct investment in Karnataka are that it has led to the growth in exports from the state to foreign countries.