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Foreign Direct Investment

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What is FDI

Foreign Direct Investment is the purchase

by the investors or corporations of one

country of non-financial assets in another

country. This involves a flow of capital

from one country to another to build a

factory, purchase a business or buy realestate.

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OBJECTIV

E

TO STUDY THE IMPACT OF FDI ON

MANUFACTURING ,INFRASTRUCTURE AND SERVICE

SECTOR.

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NEE

D

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SCO

PE

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RE

VIE

WO

F LITE

RATURE

Research report: Foreign Direct Investment and Growth: Does the

sector matter

Abstract: FDI gives great advantages to the host country and the research report

showed the benefits of FDI upon various sectors by examining the effect ofFDI on growth in the primary, manufacturing and services sector. The author

has used the empirical analysis technique and used cross country data for the

period 2004-2009 and found that the FDI has a great effect on the growth.

FDI in the primary sector showed a negative effect while investment in

manufacturing showed a positive result and the growth in the service sectorwas the most.

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Research report: Foreign Direct Investment in India

This paper analyses the route which FDI takes to come to India, its dimensions andtrends and the reasons for low FDI in India. The paper finds the main reasons of

low FDI as non implementation of approved projects, infrastructure backwardness,

low labour efficiency as well as procedural delays, red - tapism and corruption.

Research report: How FDI has helped the Indian economy to grow

Foreign direct investment (FDI) in India has played an important role in thedevelopment of the Indian economy. FDI in India has - in a lot of ways - enabled

India to achieve a certain degree of financial stability, growth and development.

This money has allowed India to focus on the areas that may have needed economic

attention, and address the various problems that continue to challenge the country.

India has continually sought to attract FDI from the worlds major investors. In

1998 and 1999, the Indian national government announced a number of reformsdesigned to encourage FDI and present a favorable scenario for investors.

FDI investments are permitted through financial collaborations, through private

equity or preferential allotments, by way of capital markets through Euro issues,

and in joint ventures. FDI is not permitted in the arms, nuclear, railway, coal &

lignite or mining industries.

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RE

SE

ARC

H ME

THO

DO

LOG

Y Descriptive methodology is being used in

this research project.

The type of test applied in this research is

the regression.

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Investing in India Entry Routes

Automatic RoutePrior Permission

(FIPB)

Investing in India

General rule

No prior permission

requiredOnly information to the

Reserve Bank of India

within 30 days of inflow/

Issue of shares

By exception

Prior Government

Approval needed

Decision generally

Within 4-6 weeks

Investing in India Entry Routes

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Manufacturing

100% FDI permitted in all activities under automatic routeexcept:

Cigar and cigarettes of tobacco

Products reserved for Small Scale Sector

Defence products

FDI Policy for Industry Sector

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FDI Policy for Service Sector-Infrastructure

Roads & Highways

Airports

Telecom

Shipping and Ports

Railways

Industrial Parks

Hospitals

Hotels & Tourism

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FDI Policy . Prohibited activitiesFDI Policy . Prohibited activities

Atomic energy

Lottery business

Betting and Gambling

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FDI Inflows- Sector -wise

Electrical equipment including softwaremoves to over all 2nd position in Nov 2006.

Services sectorshows spurt in growth andthe top sector attracting FDI moving up from

the third position.

Spurt in FDI in Real Estate causes the

construction sector to the third position in Nov

2006.

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Thank you!!!