BUSINESS ENVIRONMENT

PRESENTATION ON FDI INFLOW AND ITS IMPACT

Submitted To Dr. (Prof.) Priya Dwivedi

Submitted By Manju Mishra Mugdha Bhagya Pooja Inani

WHAT IS FOREIGN DIRECT INVESTMENT

Company acquiring or merging with a firm in a different country A firm creating a Greenfield operation in a different country A firm creating a subsidiary in a different country As a result The firm has significant control of its foreign operation Firm can affect managerial decisions of the foreign operation

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FDI - FLOW VERSUS STOCK

FDI occurs when a firm invests directly in facilities to produce and/or market a product in a foreign country Flow: Amount of FDI over a period of time (one year) Stock: Total accumulated value of foreign owned assets at a given point in time FDI is not the investment by individuals, firms or public bodies in foreign financial instruments

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WHY IS FDI IMPORTANT ?

Firms want a presence in foreign markets Firms want control over growth of these foreign markets To gain first mover advantages To ward off competitors To determine locations, advertising and other related strategic decisions in the firms interest

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ANALYSIS OF SECTOR WISE INFLOWS OF FDI IN INDIA

RANKING OF SECTOR WISE FDI INFLOWS IN INDIA

PIE CHART REPRESENTING % OF TOTAL FDI

FDI CONFIDENCE INDEX

THE SERVICE SECTOR

FDI has taken place in the service sector including: Telecommunication Information Technology Travel The service sector is followed by the computer hardware and software in terms of FDI. High volumes of FDI take place in telecommunication, real estate, construction, power, automobile, etc.

The rapid development of the telecommunication sector was due to the FDI inflows in form of international players entering the market and transfer of advanced technologies. The telecom industry is one of the fastest growing industries in India.

 With a growth rate of 45%, The telecom sector registered a Indian telecom industry has the growth of 103 percent during highest growth rate in the fiscal 2008-09 as compared to world. previous fiscal. During the year 2009 The trend in this sectors first government had raised the FDI decline till 2011 and increases in limit in telecom sector from 49 2012 due to strong RBI policy percent to 74 percent, which and increase in consultancy has contributed to the robust services and devaluation of rupees growth of FDI. against dollar.

COMPUTER SOFTWARE AND HARDWARE

FDI inflows to computer software and hardware industry in India have been significant. 100 percent FDI is permitted under automatic route to the ECommerce activities in India. FDI is permitted under automatic route in the computer hardware industry in India. The huge market for computer hardware in India, coupled with the availability of skilled workforce in this sector has boosted the inflow of FDI.

REAL ESTATE SECTOR

FDI inflows to real estate sector in India have developed the sector. The increased flow of FDI in the real estate sector in India helped in the growth, development, and expansion of the sector. India has become one of the most prime destinations in terms of construction activities as well as real estate investment.

AUTOMOBILE SECTOR
The introduction of tailor made finance schemes, easy repayment schemes has also helped the growth of the automobile sector. The basic advantages provided by India in the automobile sector includes: Advanced Technology Cost Effectiveness and Efficient workforce. India has a well-developed and competent Auto Ancillary Industry along with automobile testing and R&D centers. Opportunities of FDI in the automobile sector in India exist in establishing Engineering centers, Establishing R&D centers.

METALLURGICAL & CHEMICAL SECTOR

The increased FDI inflows to both Industries in India has helped to bring in the latest technology to the industries. The increased FDI inflows to both Industries in India has helped in improving the quality of the products of the both industries in India.

CONCLUSION
FDI has continued to play a significant t role in the Indias economy. The analysis shows that there is a positive relationship between the FDI and economic growth. Economic development of a country can be achieve by encourage more FDI, which it can help to create more employment in the country.