Attracting Foreign Direct

Investment (FDI) to India

 introduction
 Economic policymakers in most countries
go out of their way to attract foreign direct
investment (FDI).
 India, for its part, has set up the “India
Brand Equity Foundation” to try and
attract that elusive FDI dollar .
 According to UNCTAD (2007), India has
emerged as the second most attractive
destination for FDI after China and ahead
of the US, Russia and Brazil .
 Favors India
 Well developed financial sector.
 Strong industrial base.
 Well educated workers.
 FDI INFLOWS BY SECTOR
 FDI inflows reached just over US$60 billion
between August 1991and July 2007.

 electrical equipment.
 Services.
 Drugs and pharmaceuticals.
 cement and gypsum products.
 metallurgical industries.
 Telecommunications.
 Fuels.
 chemicals sectors.
FDI Equity Inflows by Region
 Why India Gets Limited FDI
 poor state of the country’s
infrastructure.
 acute labour market rigidities.
 outside urban areas highlights the
problem of bad infrastructure.
 ports, airports; both which are either too
small or bad when compared to world-
class ports or airports.
How to correct perception gaps that
may hinder FDI inflows
 image-building activities promoting the
country and its regions and states as
favourable locations for investment.
 investment-generating activities, personal
selling and establishing direct contacts
with prospective investors.
 investment-service activities tailored to
prospective and current investors’ needs.
 raising the realization ratio (i.e.percentage
of the FDI approvals translated into actual
flows).
 desperate need to create a deep
talent pool.
 advocate a policy of targeted
promotion.
 administrative barriers at the state
level as well.
 India should continue to work
towards developing a deep and liquid
corporate debt market .
 CONCLUSION
 India needs massive investments to sustain
high-quality economic growth, particularly in
the energy and infrastructure sectors (both
physical and social).
 What India needs is to put in place a
comprehensive development strategy, which
includes being open to trade and FDI.
 ultimate goal of permanently eradicating
poverty over the medium and longer-terms
 India should consciously work
towards attracting greater FDI into
R&D as a means of strengthening the
country’s technological prowess and
competitiveness .
THANK YOU