FDI

Submitted By:Chinki Chiroliya Iti Agarwal Pulkit Agarwal Siddhant Shrivastava Vikas Kalani

Introduction
Foreign Direct Investment, or FDI, is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor. It usually involves participation in management, joint venture, transfer of technology and expertise. FDI can be classified: Inward FDI and Outward FDI

FDI in india
A recent UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 20102012. The sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware.

Mauritius, Singapore, the US and the UK were among the leading sources of FDI.

In 2008-09, FDI stood at $27.3 billion.

FDI in 2009-10 was $24.2 billion

In 2010-11, FDI into India declined to $19.43 billion, a significant decrease from both 2008 and 2009

Foreign direct investment (FDI) in India may cross $35 billion in 2011-2012 as against $19.4 billion in the last financial year

Fdi benefits
Economic Growth Trade

Employment & Skill level Technology diffusion & knowledge transfer

Sector wise distribution

Services Sector 6% 6% 10% Construction Activities 31% 11% Power Automobile Industry Metallurgical Industries 12% 13% Petroleum & Natural Gas Chemicals 4% 4% 3% Computer Software & hardware Telecommunications

Housing & real Estate

Manufacturing sector
India ranks 2nd most favored destination for foreign investments after China. India ranks among the top 12 producers of manufacturing value added (MVA). In textiles, the country is ranked 4th after China, USA and Italy. Ranked 5th in electrical machinery and apparatus.

6th position in the basic metals category 7th in chemicals and chemical products 10th in leather, leather products, refined petroleum products and nuclear fuel 12th in machinery and equipment and motor vehicles.

SERVICE SECTOR
India's large service industry accounts for more than 50% of the country's GDP. Attracted $3.12 billion FDI in the first seven months of 200910 22 per cent of the total FDI inflows of $17.64 billion in the April-October for service sector In 2008-09, attracted the maximum FDI worth USD 6.11 billion

Current issues with FDI in Services Sector

Very weak linkages of service sector with the Indian economy (only few cities).

Requires highly skilled workers.

Employee Welfare in time of crisis.

FDI IN RETAIL- ADVANTAGES

Generates huge employment Increased investment in technology The huge tax revenue generated. The consumer gains from the wide variety of

choices and a more diversified basket.

FDI IN RETAIL-DRAWBACKS
Foreign Players would displace the unorganized retailers because of their superior financial strengths. The entry of large global retailers such as Wal-Mart would kill local shops and millions of jobs. Increase in real estate prices and marginalize domestic entrepreneurs

AVIATION

INTRODUCTION
In 1996, the Government announced that foreign airline shareholdings were not in the interests of Indias aviation sector

India is on Top 10 aviation market in the world 49% FDI in aviation.

Sector wise investment

Scheduled air transport
49% for foreign investor 100% for NRI

Non Scheduled transport 74% for foreign investor 100% for NRI

OTHER SERVICES
Ground handling services FDI is 74% Maintenance & Repair 100% FDI Flying Training Institute FDI 100%

Advantages
Air travel will be less expensive
Better chances for employment in the aviation sector of India

Benefits for travel trade

Spread import and export business in different countries

DISADVANTAGES
The larger number of aviation companies is reducing the overall profitability of local player The business competition in the Indian aviation market will be more and favour the big players