Impact of FDI on the industrial development in India

Type :

Research papers

Pages :

39 pages

Format :

.doc

Published date :

05/21/2009

Category :

Economics & finance

Sub category :

Economics

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Summary :

Introduction to FDI
FDI quality
Impact FDI
Government policy towards FDI
Evolution of FDI in India
Major investors
1. European union investments
2. EU vis-a-vis US and Japan FDI
Trends and pattern of FDI
1. FDI trends in India
2. Pattern of FDI
Interpretation of industrial development before and after introducing FDI in India
Banking sector
1. FDI in Indian banks
2. Guidelines to be followed by private banks
3. General guidelines on foreign investment
4. The road map
Insurance sector
1. Competition in insurance sector
2. Induction of new technology
3. India's domestic savings
4. Social responsibilities
Telecom sector
Role of FDI in India
FDI telecom sector
Pharmaceutical sector
1. Indian pharma industry
Findings
Suggestions
Conclusions
Bibliography

Abstract

Foreign direct investments (fdi) are investment of foreign assets into domestic structures, equipments and organization. fdi reflects the objectives of obtaining a lasting interest by a resident entity in one economy (Direct Investor) in entity resident in an economy other than that of the Investor (Direct investments enterprise). The lasting interest implies the existing of a long-term relation between the direct investor and the enterprise and a significant degree influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all the subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.

Most of the developing countries suffer from low level of income and low level of capital formation. However, despite this shortage of capital, these countries have developed a strong urge for industrializing and economic development. Consequently, they have embarked upon large-scale programs of industrialization. Since the domestic resources to carry out such programs have been entirely in adequate, these countries have had to depend on foreign capital

Foreign capital takes two main forms - private foreign investments and foreign aid. Private foreign investment as far as fdi is concerned, the private foreign investor either sets up a branch or a subsidiary in the recipient country. Of particular importance has been the increasing role of the multi-national corporations (MNCs) in the underdeveloped countries. These MNCs have set up a large number of branches and subsidiaries in these countries and have bought with them new technological expertise, machinery and equipment, better management and organization, superior marketing techniques etc.

Indirect foreign investment or portfolio investment takes place when the nationals (includes foreign institutional investors) (FIIs) of one-country purchase shares or debentures floated by industries in some other countries (operating in the stock market).