Foreign direct investment refers to the net inflow of
investment to acquire a lasting management interests in an enterprise operating in an economy other than that of investor
FDI is an investment to acquire long term interest operating
outside of the economy of the investor FDI is a source of external finance which mean that countries with limited amount of capital can receive finance beyond the national border from wealthier countries FDI is consider as an ingredient in economic growth WHY FDI???? • No debt creation on the part of the government. • Triggers technology transfer. • Assists capital formation. • Contributes to international integration by promoting exports. • Increases productivity and competitiveness. Improves efficiency of resources. • Promotes innovation. FDI IN INDIA Currently FDI is permitted in India; • Through financial collaborations. • Through joint ventures and technical collaborations. Through capital markets via Euro issues. • Through private placements or preferential allotments Major Sector for FDI in India are: • Infrastructure • Automotive • Pharmaceuticals • Defense • Retails • Railways Infrastructure • Chemicals • Textiles • Airlines FDI RELATED INSTITUTION IN INDIA • Foreign Investment Promotion Board (FIPB) • Foreign Investment Promotion Council (FIPC) • Foreign Investment Implementation Authority (FIIA) • Secretariat for Industrial Assistance (SIA) FDI IN MULTIBRAND RETAIL TRADING • Marketing of similar and competing products by the same firm under different and unrelated brands. For example: walmart, big bazar, tesco
• FDI in multi brand retail was not permitted in
India. however, the Government of India proposed some policy changes in late 2011. they are as follows.. • A decision has been taken by the Government to permit FDI in all products, in a calibrated manner, subject to the following conditions: • FDI in Multi Brand Retail Trade (MBRT) may be permitted up to 51%, with Government approval; • Fresh agricultural produce, including fruits, vegetables, flowers, grains, pulses, fresh poultry, fishery and meat products, may be unbranded. • Minimum amount to be brought in, as FDI, by the foreign investor, would be US $ 100 million. • At least 50% of total FDI brought in shall be invested in 'back- end infrastructure‟. Back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, ware-house, agriculture market produce infrastructure etc. • At least 30% of the procurement of manufactured/ processed products shall be sourced from Indian 'small industries' which have a total investment in plant & machinery not exceeding US $ 1.00 million. Further, if at any point in time, this valuation is exceeded, the industry shall not qualify as a 'small industry' for this purpose.
• Retail sales locations may be set up only in cities with a population
of more than 10 lakh as per 2011 Census and may also cover an area of 10 kms around the municipal/urban limits of such cities; retail locations will be restricted to conforming areas as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking; • Government will have the first right to procurement of agricultural products