Date post: | 30-May-2018 |
Category: |
Documents |
Upload: | manoranjanpatra |
View: | 231 times |
Download: | 0 times |
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 1/11
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 2/11
FORGIEN DIRECT INVESTMENT
The foreign direct investment definition says the directinvestments in any productive assets in a country by anyforeign company is called foreign direct investment or FDI.
Foreign Direct Investment includes investments in the
infrastructure development projects including constructionof bridges and flyovers, finance sector including bankingand insurance services , real estate development , retailsector etc.
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 3/11
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 4/11
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 5/11
Strategy for FDI
FIRM-S ECIFIC STRATERGY.
COST-ECONOMISINGSTRATERGY.
STRATERGY OF ENTERING INNEW AREAS.
CROSS-INVESTMENT
STRATERGY. JOINT-VENT RE WITH A
RIVAL FIRM.
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 6/11
Benefits
It helps in the economic development of theparticular country.
Foreign direct investment also permits thetransfer of technologies.
It also assists in the promotion of the competition
within the local input market of a country. Develop the human capital resources by getting
their employees to receive training on theoperations of a particular business.
Foreign direct investment can also bring inadvanced technology and skill set in a country.
Foreign direct investment assists in increasing theincome that is generated through revenuesrealized through taxation.
It also opens up the export window .
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 7/11
Disadvantages One of the most indirect disadvantages of foreign direct investment is that the economically backward section of the
host country is always inconvenienced when the stream of foreign direct investment is negatively affected.
where the host country has some sort of national secret ± something that is not meant to be disclosed to the rest of the
world. It has been observed that the defence of a country has faced risks as a result of the foreign direct investment inthe country.
Foreign direct investment may entail high travel and communications expenses.
The differences of language and culture that exist between the country of the investor and the host country could also
pose problems in case of foreign direct investment.
There is a chance that a company may lose out on its ownership to an overseas company.
At times there have been adverse effects of foreign direct investment on the balance of payments of a country.
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 8/11
In India, FDI olicy allo s for Investment
through
Through financial allianceThrough financial alliance
Through joint schemesThrough joint schemesand technical allianceand technical alliance
Through capital markets,Through capital markets,
via Euro issuesvia Euro issues
Through privateThrough private
placements or preferentialplacements or preferential
allotments .allotments .
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 9/11
FDI in India is not allowed under the
following industrial sectors:
Arms and ammunition
Atomic Energy
Coal and lignite .
Rail Transport
Mining of metals like iron,
manganese, chrome, gypsum,
sulphur, gold, diamonds,copper, zinc
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 10/11
Example
Panasonic is planning to line up US$ 200 million investment in India over the next 3 yearsfor setting up new units, brand positioning and upgrading its facilities.
Japanese engineering major, Toshiba plans to put up a power boiler plant at Ennore, north of Chennai with an initial investment of around US$ 232.91 million.
Dell would be investing more in India to commensurate with the growth of its products. Intel Corp will invest US$ 40 billion in partnership with Indian IT companies to create an end-
to-end IT solution for the health sector in the country.
HPCL and Mittal Energy will together put in US$ 81.94 billion worth investment in developinga petrol hub.
Havells India will bring in US$ 64.92 million as issue of shares and convertible warrants.
Essar Power will infuse up to US$ 2 billion as foreign equity for undertaking variousdownstream projects, including power and coal mining.
8/9/2019 FDI, Bongo
http://slidepdf.com/reader/full/fdi-bongo 11/11