Understanding Factors That Influence Foreign Direct Investment

07/06/10 1
By :
Prof. Amit Kumar

07/06/10 2
“A student pursuing management education from IILM-
Graduate School of Management, for example may find
himself or herself placed in a firm located in a totally
different country. Knowledge about international
business keeps the youngster mentally prepared to
accept assignment in an alien environment. Forewarning
is definitely forearming, for the fresh management
graduate”.
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Importance of this course
Global Business Management

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Course: International Business Management
1. Globalization
2. Global Trade & Theory
3. Global Technological Environment
4. Global Economic Environment
5. Global Political-Legal Environment
6. Foreign Direct Investments
7. Regional Economic Integration
8. Strategy and Structure of International Business
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Contents
• Nature of FDI, Why FDI?
• Forms of FDI, Modes of FDI Entry
• Theories of FDI
• Measures to Attract FDI
• Case-Study: ‘L & T Saga Continue’
• Presentation: Factors Influencing FDI, New Investment
Policy(09-14)
• Case-Study: ‘Honda in North America’
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Global Business Management Foreign Direct Investment

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In simple terms, FDI refers to the purchase of a
significant number of shares of a foreign company
in order to gain certain degree of management
control. The core of FDI are the international
flows of capital. What share of equity bestows
management control in a foreign company?
Introduction
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• Countries set different thresholds at which they
classify an international capital flow as FDI.
• Most governments set the threshold at anywhere
from 10 to 25 percent of equity ownership in a
company abroad (In US, it is 10 percent).
• In contrast, an investment that does not involve
obtaining a degree of control in a foreign company is
called portfolio investment.
Introduction
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The UN’s World Investment Report goes beyond
equity investment. According to the Report, FDI
includes three components,
1. Equity capital
2. Reinvested earnings
3. Intra-company loans
Nature of FDI
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FDI inflow in India said to include the following:
1. Reserve Bank of India’s automatic approval route for
equity holding up to 51 percent.
2. FIB’s discretionary approval route for larger projects with
equity holding greater than 51 %.
3. Acquisition of shares (since 1996).
4. RBI’s non-resident Indian (NRI) schemes, and
5. External commercial borrowings (ADR/GDR route).
Indian FDI
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• Indian definition of FDI differs from that of the IMF, as
well as of the World Investment Report.
• IMF’s definition includes external commercial
borrowings, reinvested earnings and subordinated
debts, while the World Investment Report excludes
external commercial borrowings.
Nature of FDI
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Why do countries want FDI? There are strong
reasons why MNCs are welcomed to invest in
foreign countries.
Why FDI?
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Why FDI?
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1. Filling the gap between domestically available
 Supplies of savings,
 Foreign exchange earnings,
 Government revenue and
 Human capital skills (management, technology)
and the desired level of these resources
necessary to achieve the development targets.

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Why FDI?
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2. Factories set up by MNCs act as nuclei of growth.
 An industrial enterprise established by a foreign
company gives birth to several other enterprises
which supply inputs to current company.
It is not as if only a few surrounding firms are the
beneficiaries. An entire industry, steel for
example, may get a boost. It is estimated that
every dollar of FDI increases domestic
investment by 80 percent.

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Why FDI?
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3. FDI can generate healthy competition in the recipient
countries.
 When FDI assumes the form of green field projects,
the results is the creation of new enterprises, adding
to the number of players in the market.
 Intense competition enhances consumer choice,
trends to bring down prices and boost economic
welfare of the consumers.

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Why FDI?
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3. FDI can generate healthy competition in the recipient
countries.
But when MNCs buy out popular local Brands/
companies, benefits from expected competition will
not result. For example,
Such acquisition do not
add to any additional benefits to economy.

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Why FDI?
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4. Too often, location advantages attract FDI.
 Hyundai, automobile giant (South Korea), has
chosen Chennai for its new car manufacturing plant.
• Skilled labour at low wages,
• Location of auto parts manufacturers such as
Wheels India, Brakes India, Sundaram
Fasteners/Brakes, Bimetal Bearings, and India
Pistons in and around Chennai,
• Guaranteed power supply, Cheap land and
• Proximity to sea port have attracted the plant to
the capital city of Tamil Nadu.

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4. Too often, location advantages attract FDI.
 France has been the target of much MNC activity.
Daimler-Chrysler has recently built a new factory in
France because of its faith in the worker’s
productivity and work ethics.
 This explains the FDI undertake by many of the
world’s oil companies, which had to invest where
oil was located.
Why FDI?
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Why FDI?
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5. FDI often depends on a country’s political
attempts to reduce security risks. For example:
Another move behind FDI…During the 1980s, the
US government instituted various incentives to
increase the profitability of US investments in
Caribbean countries that were unfriendly to
Cuba’s Castro regime.

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Why FDI?
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 US wanted to strengthen the economies of those
friendly nations through growth of the FDI and make it
difficult for unfriendly leftist govt. to gain control.
 With the end of Civil war, US ended investment
incentives in Caribbean region, and much investment
was diverted to Mexico because of NAFTA.

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Why FDI?
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Chinese state-owned petroleum companies have
been investing abroad so as to minimize
dependence on foreign companies for oil
supplies. The move may also help China hold
down prices on the petroleum it receives.

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6. It is the poor countries that deserve FDI more than
any others.
How to alleviate poverty? Aid from international
institutions and rich countries can be a temporary
measure. Economic growth ushered in by
increased investment can be a permanent solution.
Why FDI?
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6. It is the poor countries that deserve FDI more than
any others.
‘Many of the poorest countries are simply being
bypassed by globalization, and the promises of
the rich countries are not being fulfilled. We need
more globalization that reaches poor countries.
He added that FDI would be the strongest
engine of growth in the developing world’.
Why FDI?
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TYPES OF FDI
NATURE OF BUSINESS MOTIVE BASED VIEW
ASSET- BASED VIEW
ASSET AUGMENTING ASSET ACQUIRING
GREENFIELD INVESTMENT MERGER & ACQUISITION
BROWNFIELD
Horizontal Vertical
Conglomerate
Resource
Seeking
Market
Seeking
Efficiency
Seeking
Strategic
Asset
Seeking
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TYPES OF FDI
NATURE OF BUSINESS
Horizontal
Vertical
Conglomerate
• This FDI said to take place when a firm invests
abroad in the same industry in which it operates in
the home country.
• It represents, a geographical diversification of the
MNE’s established domestic product line.
• Most Japanese MNEs believe that this approach
enables them to share experience, resources, and
knowledge already developed at home, thus
reducing risk.
• The acquisition of Ranbaxy, a leading Indian
pharmaceutical MNE, by Japan’s Daiichi
Sankyo is an example of horizontal FDI.
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TYPES OF FDI
NATURE OF BUSINESS
Horizontal
Vertical
Conglomerate
• This FDI refers to investment in activities along the
firm’s existing supply chain to avail the benefits of
vertical integration.
• It occurs when the MNE enters a foreign country to
produce intermediate goods that are intended for
use as input in its home country production process
(backward vertical FDI), or to market its homemade
products overseas (forward FDI).
• ONGC, which is in the business of petroleum refining in
India, has purchased oil fields in South Africa.
• When Volkswagen entered the US market it acquired a
large number of dealers rather than distribute its
products through independent US dealers.
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TYPES OF FDI
NATURE OF BUSINESS
Horizontal
Vertical
Conglomerate
• If FDI abroad is to manufacture products not
manufactured by the parent company at home, it is
called conglomerate FDI.
• Hong Kong MNEs often set up foreign subsidiaries
or acquire local firms in mainland China to
manufacture goods that are unrelated to the parent
company’s product portfolio.
• The main purpose is to seize emerging market
opportunities.
“ Horizontal FDI is used by both developed and developing country
MNEs. It enables MNE to quickly establish its competitive advantage
in the host country. Conglomerate FDI involves more difficulties”.
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TYPES OF FDI
MOTIVE BASED VIEW
Resource
Seeking
Market
Seeking
Efficiency
Seeking
Strategic
Asset
Seeking
• This FDI attempts to acquire particular resources at
a lower real cost than could be obtained in the home
country.
• Resource-seeking FDI occurs when there is need to
acquire or secure the supply of raw materials and
energy sources in short supply at home.
• Mainly classified into three groups:
1. Those seeking physical resources.
2. Those looking for plentiful suppliers of cheap
and/or skilled labor.
3. Those seeking technological, organizational
and managerial skills.
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TYPES OF FDI
MOTIVE BASED VIEW
Resource
Seeking
Market
Seeking
Efficiency
Seeking
Strategic
Asset
Seeking
• Market-seeking FDI attempts to secure market
share and sales growth in the target foreign market.
• Apart from this, the reasons for Market-seeking
FDI includes:
1. The firm’s main suppliers or customers may
have set up foreign producing facilities
abroad and the firm needs to follow them
overseas;
2. The firm may consider it necessary, as part of
its global production and marketing strategy,
to maintain a physical presence in the leading
market served by its competitors.
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TYPES OF FDI
MOTIVE BASED VIEW
Resource
Seeking
Market
Seeking
Efficiency
Seeking
Strategic
Asset
Seeking
• Efficiency-seeking FDI aims to take
advantage of different factor
endowments, economic systems,
policies and market structures to
concentrate production in a limited
number of locations and reduce cost of
operation.
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TYPES OF FDI
MOTIVE BASED VIEW
Resource
Seeking
Market
Seeking
Efficiency
Seeking
Strategic
Asset
Seeking
• This FDI attempts to acquire the assets of
foreign firms so as to promote their long-term
strategic objectives, especially advancing their
international competitiveness.
• MNEs with this intension often establish global
strategic alliances or acquire local firms.
• Procter & Gamble has sales in over 140
countries and on the ground operations in
over 70 countries. Its strategic aims behind
product and geographical diversifications
include better resources, larger markets and
higher efficiency.
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TYPES OF FDI
ASSET-BASED VIEW
ASSET AGUMENTING ASSET ACQUIRING
GREENFIELD INVESTMENT MERGER & ACQUISITION
BROWNFIELD
• Greenfield investment is an investment process which results in the
creation of new assets in the host country.
• M & A as a form of investment may either involve the outright purchase of
an existing company or the amalgamation of two existing companies.
• Brownfield investment is a combination of Greenfield investment and
M&A. It denotes an investment where an existing firm acquires another
firm and infuses it with fresh capital and assets after the acquisition.
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Modes of FDI Entry
BRANCH OFFICE
Co-Operative
Joint Venture
Equity
Joint Venture
SUBSIDIARY
JOINT VENTURE(GSA)
Greenfield
Investment
Merger &
Acquisition
UMBRELLA HOLDING COMPANY
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Modes of FDI Entry
BRANCH OFFICE
A branch office is a foreign entity in a host country in
which it is not incorporated but exists as an
extension of the parent and is legally constituted as
a branch. They are entitled to run businesses within
a specified scope or location.
Corporate law in many countries allows foreign
companies to open branches that engage in production
and operating activities.
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Modes of FDI Entry
BRANCH OFFICE
• Branch offices are particularly utilized by transnational
banks, law firms and accounting or consulting
companies.
• Britain’s Standard Bank had 1,000 branches in South
Africa in 2001, and was ranked the largest foreign bank
in that country.
• Branch offices may offer a simple means for
establishing or expanding a presence in a target
country, but since they do not have legal-person status,
the foreign parent company is liable if civil charges are
brought against the branch.
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Modes of FDI Entry
JOINT VENTURES
• These can take the form of either cooperative
(contractual) Joint Venture or Equity Joint Ventures.
• These are gaining importance worldwide as global
competition intensifies for access to market, products,
and technologies.
• Most large MNCs such as Motorola, Siemens, Sony,
GM, Daimler, and Toyota have built such alliances.
• In Japan alone, Royal Dutch Shell has established
more than 30 joint ventures.
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Modes of FDI Entry
CO-OPERATIVE JOINT VENTURE
• It is a collaborative agreement whereby profits and other
responsibilities are assigned to each party according to a
contract. These are not necessarily according to each
partner’s percentage of the total investment.
• Many cooperative programs today involve joint activities
without the creation of new corporate entity. Like,
Research partnership, co-production, joint marketing,
long-term supply agreement.
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Modes of FDI Entry
CO-OPERATIVE JOINT VENTURE
Boeing entered in China in the late 1970s through a co-
production agreement with the Xian Aircraft Manufacturing
Company which co-produced 737 vertical fins, stabilizers
and 757 cargo doors.
• Co-operative Joint venture normally take the form of
a document (agreement), whereas equity joint
venture take the form of new entity.
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Modes of FDI Entry
EQUITY JOINT VENTURE
• The most common foreign entry for MNCs has been
through equity joint ventures, establishing a new
entity that is jointly owned and managed by two or
more parent firms in different countries.
• To set up an equity joint venture, each partner
contributes cash, facilities, equipment, materials,
intellectual property rights, labor or land use rights.
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Modes of FDI Entry
EQUITY JOINT VENTURE
According to JV laws in most countries, a foreign
investor’s share must exceed a certain threshold of
the total equity (25% in many nations). However, in
government controlled or institutionally restricted
sectors, foreign investment is often restricted with
respect to equity arrangement.
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Modes of FDI Entry
• Umbrella holding company is an investment company
that unites the firm’s existing investments such as
branch offices, joint ventures, and wholly-owned
subsidiaries under one umbrella so as to combine
sales, procurement, manufacturing, training and
maintenance within the host country.
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Modes of FDI Entry
• DuPont (as MNE that are multidivisional) faced the
coordination problem in China. Some joint venture
there belong to, and are controlled only by, its
pharmaceutical division, whereas others belong to its
plastic or petroleum divisions. In 1989 it established
DuPont China Ltd as its holding company to unite and
integrate existing investments.
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Modes of FDI Entry
“ To establish an umbrella company, MNEs may
need to comply with certain conditions set by the
host-country government. In China, for example, the
foreign investor must have established a minimum
of 10 subunits in the country and engaged in
manufacturing or infrastructure construction to which
it has contributed at least $30 million in registered
capital”.
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Modes of FDI Entry
Differences: (Joint Venture Vs Mergers)
1. The major difference between equity joint venture and
mergers is that the former involves formation of a third
entity whose duration is often limited and specified in
the contract, whereas the latter does not form any third
party nor does it specify any duration.
2. Joint venture parties remain independent after forming
a venture, but two parties are integrated into a single
organization after a merger.
3. Also, mergers combine all of the partners’ assets,
while a joint venture involves only some of these
assets.
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Theories of FDI
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Theories of FDI
Theories
of FDI
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Eclectic
Market
Imperfections
International
Product
Life Cycle
Internalization
Market
Power

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Theories of FDI
International Product Life Cycle
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• IPLC theory, propounded in 1960s by Raymond Vernon
of Harvard Business School, has two lessons: why
trade takes place? and why investment occurs?.
• Theory explain how a company will begin by exporting
its products and eventually undertake foreign direct
investment, as the product moves through its life cycle.
• Theory has identified 3 stages in the life of a product:
1. New Product Stage
2. Maturing Product Stage
3. Standardized Product Stage

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Theories of FDI
Market Imperfections
• Market imperfection can be defined as anything that
interferes with trade. It focuses on imperfections in the
market (example trade barriers) that would decide FDI.
• According to Hymer, Kindleberger and Caves, the
existence of MNCs is reasoned by structural market
imperfections.
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Perfect or Pure Competition in Market
In economics, perfect competition occurs in markets in
which no participant has market power i.e. every
participant is a "price taker“.
Specific characteristics may include:
* Infinite Buyers/Infinite Sellers.
* Zero Entry/Exit Barriers – It is relatively easy to enter or
* Perfect Information - Prices and quality of products
* All firms have relatively small market shares.
* Homogeneous Products – firm sales identical product
Managing MNCs in International Business
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Theories of FDI
Eclectic Theory
John Harry Dunning, (June 26,
1927 – January 29, 2009) was a
British economist. He researched
the economics of international
direct investment and the
multinational enterprise from the
1950s until his death. In the 1980s,
he published the eclectic paradigm
or OLI-Model/Framework as further
development on the theory of FDI.
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Theories of FDI
Eclectic Theory
According to Dunning, FDI will occur when three
conditions (advantages of ownership, location and
internalization ) are uniquely combined.
Ownership Advantage:
– This advantage stems from the fact that the firm is
proprietary to some unique competitive advantage
that helps it overcome the disadvantages of
competing with foreign firms in overseas markets.
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Theories of FDI
Eclectic Theory
Ownership Advantage:
‘IBM generates significant income from its voice
recognition software used by many Chinese. This
software, first developed in the US, did not generate
sizeable income until a Chinese version was developed
by the company’s subsidiary in Beijing’.
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Theories of FDI
Eclectic Theory
Location Advantage:
– Advantage of locating a particular factory in a
specific location because of unique characteristics
of that location. Like, Availability of natural
resources such as oil in the Middle East, timber in
Canada and Copper in Chile.
– Cater Pillar, manufactures bulldozers in Brazil to
take advantage of lower labour costs and avoid high
tariff walls on goods exported from its US factories.
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Theories of FDI
Eclectic Theory
Internalization Advantage:
– Internalization refers to the firm’s inherent flexibility
and capacity to produce and market through its own
internal subsidiaries, rather than producing through
an arrangement such as licensing or....
– The firm must benefit from controlling (internalizing)
the foreign business activity than leaving it to a local
company to provide the service.
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Theories of FDI
Eclectic Theory
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Ownership
Advantage
Location
Advantage
Internalization
Advantage
1.Exporting YES
2.Licencing YES YES
3. Franchising YES YES
4. FDI YES YES YES

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Theories of FDI
Market Power
• This theory states that a firm seeks to establish a
dominant market presence in an industry by
undertaking FDI. Dominant market presence results in
greater profits to the firms.
• Market power is often sought to be achieved through
vertical integration. Such integration may be the
extension of the company’s activities into its supply
chain (backward) or absorbing of its output (forward).
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Theories of FDI
Market Power
Increasing numbers of manufacturers today are
pursuing a forward integration strategy by establishing
websites to sell products directly to consumers.
Backward integration strategy can be especially
appropriate when a firm’s current suppliers are
unreliable, too costly or cannot meet the form’s needs.
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Theories of FDI
Internalization Approach
• Propounded by Buckley and Casson, the internalization
theory is based on two principles:
1. Firms internalize missing or imperfect external markets
2. Firms choose locations for their constituent activities to
minimize the overall costs of their operations.
• The location aspect of the theory suggests three primary
motivations:
1. Foreign-market-seeking FDI
2. Efficiency (cost reduction)-seeking FDI
3. Resource-seeking FDI
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Theories of FDI
Internalization Approach
• Market-seeking FDI will be undertaken by firms for
traditional trade supporting reasons, to access
distribution networks, to facilitate the exports of
domestic products and to enhance exports from the
host country.
• Efficiency-seeking FDI will occur when outward
investors seeks lower-cost locations for operations, in
particular, in their search for lower cost labor.
• Resource-seeking FDI occurs when there is need to
acquire or secure the supply of raw materials and
energy sources in short supply at home.
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Factors Influencing FDI
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Factor Influencing FDI
Supply
Factors
Demand
Factors
Government Factors
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Supply
Factors
Production costs
Logistics
Resource
availability
Access to technology
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Supply Factor: Production Costs
Firms seek competitive advantage through low production
cost. MNCs locate production facilities in low wage
countries.
• Local incentives were the main objective behind
establishing manufacturing operations by Intel in Costa
Rica and by Mercedes in Alabama.
• Ford has set up a company at Chennai to make one lakh
vehicles per annum. Ford plans to export cars to South
Africa from Chennai.
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Supply Factor: Logistics
MNCs seek to invest in subsidiaries in foreign markets if the
cost of shipping raw material is high.
• Coke and Pepsi have set up bottling plants in India as
the cost of transporting water from the country is
considerable.
• The liberalization of Latin American markets brought a
surge of FDI in transportation and physical distribution,
and foreign logistic providers have upgraded the region’s
transportation and warehousing facilities.
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Supply Factor: Natural Resources
MNCs tend to utilize FDI to access natural resources that are
critical to them. Natural resources attract many MNCs.
• Because of decrease in oil production in US, many oil
companies have been forced to make significant
investment worldwide to obtain new oil reserves.
• To access cheaper energy resources used in
manufacturing, Japanese firms are relocating production
in China, Mexico & Vietnam, where energy cost is lower.
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Supply Factor: Access to Technology
Motive behind FDI is to get access of technology.
• Many of the Swiss Pharmaceutical companies, have
invested in US small biogenetics companies in order to
gain cutting edge technology.
• Britain’s Smith Kline (now merged with Glaxo) invested
$86 millions in Cadus Pharmaceutical of New York to
access the latter’s yeast work.
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Demand
Factors
Customer
access
Follow
clients
Follow
rivals
Exploitation of
competitive advantage
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Demand Factor: Customer Access
Certain MNCs need to be physically present in foreign
markets to serve customers better.
• Starbucks can not serve fresh coffee to its customers in Japan
from its head office in the US nor can KFC provide freshly
fried chicken in India from its restaurant in US.
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In a significant step toward market entry in India, U.S.-based
Starbucks Coffee Company signed a non-binding
memorandum of understanding (MoU) with Tata Coffee,
one of the region's leading providers of premium Arabica
coffee beans.

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The MoU will create avenues of collaboration between the
two companies for sourcing and roasting high-quality green
coffee beans in Tata Coffee's facility in Coorg in south India.
In addition, Tata and Starbucks will jointly explore the
development of Starbucks retail stores in associated retail
outlets and hotels.
The two companies also will explore social projects to
positively impact communities in coffee growing regions
where Tata operates.
MOU

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Tata Coffee Chairman R. K. Krishna kumar said, “We
welcome Starbucks entry into India because of its unique
experience with the store format and for its commitment to
society, values that we share.”
“India is one of the most dynamic markets in the world with a
diverse culture and tremendous potential,” said Starbucks
Coffee Company Chairman, President and CEO Howard
Schultz.
MOU

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Demand Factor: Competitive Advantage
A company enjoying great reputation may seek to establish
subsidiaries in overseas countries to encash on its
popularity.
An owner of a valuable trade mark, brand name or technology
may choose to operate in foreign countries rather than
export to them.
• Toyota’s presence in India, though it entered Indian
market late, Toyota has been able to leverage its world
wide reputation & position itself well among Indian buyers.
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Demand Factor: Follow the Clients
Often, clients of a company attract FDI. If one of the clients
build a foreign facility, the company may decide to locate
a new factory of its own nearby, thus enabling it to
continue to supply its customer promptly and attentively.
• When Japanese automakers set up their plants in the US,
several Japanese component parts suppliers also joined the
bandwagon by establishing their own factories, warehouses
and research facilities there.
• Similarly, after Samsung decided to construct and operate an
electronics factory in northeast England, six of its Korean parts
suppliers also moved into England.
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Demand Factor: Follow the Rivals
Competitor analysis indicates the geographic strength and
weaknesses of individual rivals. From such analysis,
firms can select markets for investment.
MNCs routinely monitor market sizes and growth rates in over
150 countries. Always, large and medium-sized growth
markets are attractive one.
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Market
Growth /Size
Growth Stable Declining
Large 1 2 3
Medium 4 5 6
Small 7 8 9

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Government Factors
Economic priorities
Avoidance of
Trade barriers
Economic
development
incentives
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Government Factor: Economic Priroties
Economic priorities of developing countries often clash with
profit motives of MNC. Hence, developing countries
impose restrictions on the flow of FDI into their
economies.
• Compared to other developing countries, India followed a
restrictive policy towards FDI until 1991, relying more on
bilateral and multilateral agreements.
• Precisely for many reasons, MNCs were avoiding
investment in India till 1991. But, as is too well known,
the scenario in India is totally different now.
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Government Factor: Avoidance of Trade barriers
Fuji Photo Film Company has invested $200 million to set up
a manufacturing plant in the US.
• Earlier, the company supplied film to its US customers
from its factories in the Netherland and Japan. While
exporting to the US, Fuji was paying 3.7 percent of tariff
imposed by the US government. This tax has been saved
by producing film in the US itself.
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Government Factor: Developmental Incentives
Many governments offer attractive incentives, many through
red carpet welcome to MNCs, to invest in their
economies, particularly the developing countries.
The primary motive to attract FDI is to fill the resource gaps
which exist in industrializing countries.
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FDI is allowed under two routes:
• Automatic Route : Where RBI approval is required
• Non-automatic Route : where approval from
government is required
In the following areas 100% FDI is allowed….
Areas where FDI is Permitted
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1. Airports
2. B2B e-commerce
3. Drugs & pharmaceuticals not falling under automatic route
4. Integrated township development
5. Courier services other than distribution of letters
6. Non-banking financial services
7. Hotel & Tourism
8. Software development
9. Film industry
Automatic Route
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1. Private oil refineries
2. Pollution control and management
3. Management consultancy
4. Venture capital funds/companies
5. Exploration and mining of minerals other than diamonds
and precious stones
6. Food processing and many more
Automatic Route
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1. Gambling & betting
2. Atomic energy
3. Lottery business
4. Business of chit fund
5. Nidhi company
6. Agricultural or plantation activities (excluding floriculture,
horticulture, development of seeds, animal husbandry,
cultivation of vegetables, mushrooms etc. under controlled
conditions) and plantations (other then tea plantations).
Areas where FDI is not Permitted
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• http://www.gmrgroup.in/Corporate/Partners___Alliances.html
• http://www.unctad.org/Templates/Page.asp?intItemID=4979
• http://dgftcom.nic.in/exim/2000/policy/ftp-plcontent-0910.htm
• http://commerce.nic.in/
• http://commerce.nic.in/trade/national_ftpp.asp?id=3&trade=n
Important Links
IILM-GSM

Understanding Factors That Influence Foreign Direct Investment

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