All the information about fdi in india

1. B Y
M O H A M M E D K A S H I F A L I
B . C O M ( C A )
1 5 0 9 5 2
Foreign Direct Investment
(Issues & Challenges)

2. Introduction
 Foreign direct investment (FDI) is direct investment into
production or business in a country by a company in
another country, either by buying a company in the target
country or by expanding operations of an existing business
in that country.
 Foreign Direct Investment (FDI) in India is the
major monetary source for economic development in
India.

3. Definition
 Foreign Direct Investment (FDI) as defined in Dictionary of
Economics is investment in a foreign country through the
acquisition of a local company or the establishment there of
an operation on a new site.
 In short FDI refers to capital inflows from abroad that is
invested in or to enhance the production capacity of the
economy.

4. Objectives
 The main objective is to analyze the current scenario in
India.
 To investigate the controversial views of the Indian trade of
various investments.
 To evaluate the likely challenges and threats of FDI in
India.
 To know the requirement of amount of foreign investment
by India, for its economic Development .
 To know the significance of FDI for developing countries in
bridging the gap between the saving and investment.

5. Need of FDI
 FDI plays a major role in developing countries like India.
They act as a long term source of capital as well as a source
of advanced and developed technologies. The investors also
bring along best global practices of management.
 As large amount of capital comes in through these
investments more and more industries are set up. This
helps in increasing employment.
 FDI also helps in promoting international trade. This
investment is a non-debt, non-volatile investment and
returns received on these are generally spent on the host
country itself thus helping in the development of the
country.

6. How FDI benefit India
 In the 2015-2016 fiscal year, it is expected that FDI will
exceed 60 billion US dollars. In the 2013-14 fiscal year, the
aggregate foreign investment amounted to 29 billion
dollars.
 This increase owes a lot to the high expectations that
foreign investors have from the Modi administration.
 It has been estimated that in the ongoing Twelfth Five Year
Plan, which continues till 2017, India will need almost a
trillion US dollars in FDI.
 This money will be used to develop infrastructure such as
highways, airways and ports.

7. SWOT analysis of FDI
 SWOT analysis is one of the primary steps in
strategic management.
 It contains analysis of
 Strengths
 Weakness
 Opportunities
 Threats.

8. Strengths of FDI
 Fast growing economy.
 Highest shop density in the world. Customers will
have access to greater variety of international
quality branded goods.
 Employment opportunities both direct and indirect
have been increased. Farmers get better prices for
their products through improvement of value
added food chain.

9. Weakness of FDI
 Low capital investment .
 Will mainly cater to high-end consumers placed in
metros and will not deliver mass consumption goods
for customers in villages and small towns.
 Retail chain is yet too settled down with proper
merchandise mix for the mall outlets.
 Small size outlets are also one of the weaknesses in the
India, 96% of the outlets are lesser than 500 sq. ft.
 Lack of trained & educated force. (vi) Lack of
competition.
 More prices as compared to specialized shops.

10. Opportunities of FDI
 Global strategy giant take India as key market.
 FDI can become one of the largest industries in
terms of numbers of employees and establishments.
 Rural marketing is still unexploited Indian market. It
will enhance the financial condition of farmers.

11. Threats of FDI
 Jobs in the manufacturing sector will be lost.
 Started roadside bargains.
 Work will be done by Indians and profits will go to
foreigners.

12. Major Issues in FDI
 Restrictive FDI regime.
 Lack of clear cut and transparent spectral policies for FDI.
 High tariff rates by international standards.
 Lack of decision-making authority with the state
governments.
 Limited scale of export processing zones 6. No
liberalization in exit barriers.
 Financial sector reforms.
 High corporate tax rates

13. Challenges of FDI in India
 Promote cartels and will create monopoly.
 Increase in the real estate prices.
 Marginalize domestic entrepreneurs.
 The financial strength of foreign players would
displace the unorganized players.

14. FDI in India during 2015-2016
 The ruling NDA government in the center has announced a
lot of relaxations for FDI and the business done under the
FDI umbrella in India.
 The Indian government, during the 2014-15 fiscal year,
announced that it would allow FDI worth US$ 14.65 billion
into the railways infrastructure. Some of the most
expensive and largest railway projects will be carried out
under these investments.

15. FDI Investing countries in India
Country Name Amount(Rupees in
crores) 2015-2016
Total investment from
2000-2016
Mauritius 54706 480,363
Singapore 89510 256,666
UK 5938 115,591
Japan 17275 110,671
USA 27695 94,574
Netherlands 17275 94,533
Germany 6361 44,870
Cyprus 3317 42,680
France 3937 26,525
UAE 6528 21,648
Total 262322

16. Sector attracting FDI equity inflows
Sector Amount(Rupees in
crores) 2015-2016
Total investment from
2000-2016
Service sector 45415 258,354
Construction
development
727 113,936
Computer Hardware &
software
38351 112,183
Telecommunications 8637 92,728
Automobile Industry 16437 81,394
Drugs & Pharmaceuticals 4975 70,097
Chemicals 9664 59,555
Trading 25244 68,836
Power 5662 52,613
Hotel & Tourism 8761 49,709

17. Conclusion
 Foreign direct investment, as one of the core features of
globalization, grew at an unprecedented pace and even
faster than world output and trade.
 It has been argued that FDI benefits domestic industry and
provides opportunities for technological up-gradation,
access to global managerial skills and practices, optimal
utilization of natural and human resources, making host
country's industry internationally competitive, providing
backward and forward linkages and access to international
quality goods and services.

18. THANK YOU…………!