This document discusses foreign direct investment (FDI) in India. It provides background on FDI, noting that it involves investment by foreign companies in other countries through greenfield investments or mergers and acquisitions. The document then outlines several benefits of FDI for both exporting and importing countries, including increased exports, employment, and economic growth. Specific data is presented on recent FDI trends in India, with the telecommunications and computer sectors attracting the most investment. While FDI brings advantages like jobs and technology, it can also introduce challenges such as foreign dominance and cultural changes.

1. SUBMITTED BY: RAKSHA MESHRAM
ID NO: AFB-22025
SUBMITTED TO: MERVIN FELIX CALEB

2. INTRODUCTION
 FDI stand for FOREIGN DIRECT INVESTENT, also it can be divided
as an investment made by a resident of one economy in another
economy.
 FDI is a process whereby residents of one country acquires
ownership of assets for the purpose of controlling the production,
and other activities of a firm in another country( Host country).
 There are more then 80,000 MNCs operating internationally with
more than 800,000 affiliates around the world.
 FDI is a long- term investment by MNCs ( multinational
corporations) in countries other than their home market.
 FDI can occur in two ways:
1) Greenfield Invetsment : FDI usually occur through MNCs
building n new plants or expanding their existing
facilities in foreign countries. This is known as greenfield investment.
2) Mergers & Acquisition : MNCs merge with or acquire (buy)
existing firms in foreign countries.

3. FDI PLAYS A MAJOR ROLE IN THE ECONOMIC DEVELOPMENT:
 For the exporting countries (outflow of FDI) , export of capital allows for an increased
use of capacities, and of course higher return on investment capital.
 It also means higher exports, the ability to finance new investments which affects the
growth of employment, income and labor productivity.
 Foreign direct investment policy in India is regulated under the Foreign Exchange
Management ACT (FEMA) 2000 administered by the reserve bank of India(RBI).

4. GLOBAL FDI:
 According to Indian Brand Equity Foundation (IBEF), the total FDI investments
in India during April-December 2017 stood at US$ 35.94 billion as the
government has been providing relaxation on FDI which is attracting a large
number of foreign investments.
 The Telecommunications sector has attracted the highest FDI equity inflow
during April-December 2017, i.e. US $ 6.14 billion, followed by computer
software and hardware sector at US$ 5.16 billion & Services at US$ 4.62
billion.
 The total FDI equity inflows for December 2017 reached US $ 4.82 billion.
 The period of April-December 2017, India gained maximum FDI equity
inflows from Mauritius, i.e. US$ 13.35 billion, followed by Singapore (US$ 9.21
billion), Netherlands (US$ 2.38 billion), USA (US$ 1.74 billion), and Japan (US$
1.26 billion).
 India is one of the top gainers of FDI.

5. 2020-2021 scenario:
 Foreign direct investment have become the major economic driver of globalization,
according to over half of all cross – border investment.
 In current economy 2020-2021, FDI into the country grew by 19% to USD 59.63
billion.
 Total FDI, including equity, reinvestment earning and capital, rose 10% to USD
81.72billion in 2019-20.
 During july 1-21, export crossed USD 22 billion and it is “ poised to cross USD 32-
33 billion by end of the month (july).
 Which means our run rate is on track to achieve USD 400 billion of exports target for
the first time ever.
 India has inked FTAs with several countries, including Japan, South Korea, Singapore,
and ASEAN members.
 The UK, EU, Australia, Canada ,UAE are countries with whom we can very quickly
expand our discussion and engagements.

6. ADVANTAGES OF FDI
 Increase in domestic employment/ drop in unemployment.
 Investment in needed infrastructure.
 Positive influence on the balance of Payments.
 New technology and “ know how” Transfer.
 Increased capital investment.
 Targeted regional and sectoral development.

7. DISADVANTAGE OF FDI
 Industrial sector dominance in the domestic market.
 Technology dependence on foreign technology source.
 Disturbance of domestic economic plans in favor of FDI- Directed
activities.
 “Cultural change” Created by “Ethnocentric staffing” the infusion of
foreign culture and foreign business practices.

8. Reference:
 https://www.hindustantimes.com/business/foreign-investment-in-india-at-
historic-high-streak-to-continue-piyush-goyal-10162712678943.html
 https://www.ibef.org/economy/foreign-direct-investment.aspx
 https://www.livemint.com/economy/india-attracted-highest-ever-fdi--inflow-
of-81-72-billion-during-fy-2020-21-govt-11621856508557.html

9. THANK YOU
!