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FDI MEANS FOREIGN DIRECT FDI MEANS FOREIGN DIRECT INVESTMENT..FDI IS A MEASURE OF INVESTMENT..FDI IS A MEASURE OF

FOREIGN FOREIGN OWNERSHIP OF DOMESTIC OWNERSHIP OF DOMESTIC

PRODUCTIVE ASSETSPRODUCTIVE ASSETS SUCH AS FACTORIES,LAND ETC.. FDI SUCH AS FACTORIES,LAND ETC.. FDI

IS IS BASICALLY FOR A LONG DURATION BASICALLY FOR A LONG DURATION

OF TIME OF TIME AND CANNOT BE EASILY AND CANNOT BE EASILY

LIQUIDATED..IT IS LIQUIDATED..IT IS CONSIDERED AS AN IMPORTANT CONSIDERED AS AN IMPORTANT

DRIVER OF DRIVER OF GROWTH FOR A COUNTRY.. GROWTH FOR A COUNTRY..

FINANCIAL COLLABORATIONSFINANCIAL COLLABORATIONS JOINT VENTURES AND TECHNICAL JOINT VENTURES AND TECHNICAL

COLLABORATIONSCOLLABORATIONS CAPITAL MARKETS VIA EURO CAPITAL MARKETS VIA EURO

ISSUESISSUES PRIVATE PLACEMENTS OR PRIVATE PLACEMENTS OR

PRIVATE ALLOTMENTSPRIVATE ALLOTMENTS

o INCREASE INVESTMENT LEVEL AND THERE INCREASE INVESTMENT LEVEL AND THERE BY INCOME AND EMPLOYMENT.BY INCOME AND EMPLOYMENT.

o INCREASE TAX REVENUE OF GOVT.INCREASE TAX REVENUE OF GOVT.o FACILITATES TRANSFER OF TECHNOLOGY FACILITATES TRANSFER OF TECHNOLOGY o INCREASE EXPORTS AND REDUCE IMPORT INCREASE EXPORTS AND REDUCE IMPORT

REQUIREMENTS..REQUIREMENTS..o IMPROVES QUALITY AND REDUCES COST IMPROVES QUALITY AND REDUCES COST

OF INPUTS.OF INPUTS.o INCREASE COMPETITION AND BREAK INCREASE COMPETITION AND BREAK

DOMESTIC MONOPOLIES..DOMESTIC MONOPOLIES..

FLOW TO HIGH PROFIT AREAS FLOW TO HIGH PROFIT AREAS RATHER THAN MAIN CONCERN RATHER THAN MAIN CONCERN AREAS .AREAS .

SOMETIMES INTERFERS IN POLITICSSOMETIMES INTERFERS IN POLITICS

SOMETIMES ENGAGE IN UNFAIR SOMETIMES ENGAGE IN UNFAIR AND UNETHICAL TRADE PRACTICES.AND UNETHICAL TRADE PRACTICES.

SOMETIMES RESULT IN SOMETIMES RESULT IN MINIMISING COMPETITION AND MINIMISING COMPETITION AND CREATE MONOPOLYCREATE MONOPOLY

INSURANCE- 26%INSURANCE- 26%

DOMESTIC AIRLINES- 49%DOMESTIC AIRLINES- 49%

PRIVATE SECTOR BANKS- 74%PRIVATE SECTOR BANKS- 74%

TELECOM SERVICES-FOREIGN TELECOM SERVICES-FOREIGN EQUITY 74%EQUITY 74%

MINING OF COAL AND LIGNITE MINING OF COAL AND LIGNITE FOR CAPTIVE CONSUMPTION- FOR CAPTIVE CONSUMPTION- 74%74%

FDI EQUITY LIMITS –FDI EQUITY LIMITS –AUTOMATIC ROUTE..AUTOMATIC ROUTE..

FDI REQUIRINGFDI REQUIRINGPRIOR APPROVALPRIOR APPROVAL

DEFENCE PRODUCTION- 26%DEFENCE PRODUCTION- 26%FM BROAD CASTING- 20%FM BROAD CASTING- 20%NEWS AND CURRENT AFFAIRS- NEWS AND CURRENT AFFAIRS- 26%26%TEA PLANTATION- 100%TEA PLANTATION- 100%DEVELOPMENT OF AIR PORTS- DEVELOPMENT OF AIR PORTS- 100%100%COURIER SERVICES-100%COURIER SERVICES-100%

ENGINEERING AND MANUFACTURING ENGINEERING AND MANUFACTURING SECTORSSECTORS

HOTELS AND TOURISMHOTELS AND TOURISM

INDUSTRIAL TOWNS ,PARKS.INDUSTRIAL TOWNS ,PARKS.

POWER GENERATIONPOWER GENERATION

IT INCLUDING E-COMMERCEIT INCLUDING E-COMMERCE

ADVERTISING AND FILM INDUSTRYADVERTISING AND FILM INDUSTRY

ROADS AND HIGHWAYSROADS AND HIGHWAYS

PROFITABILITY PROFITABILITY

COSTS OF PRODUCTIONCOSTS OF PRODUCTION

ECONOMIC CONDITIONSECONOMIC CONDITIONS

GOVERNMENT POLICIESGOVERNMENT POLICIES

POLITICAL FACTORSPOLITICAL FACTORS

INDIA AS FDI DESTINATIONCONSIDERING THE ANTICIPATED LEVEL CONSIDERING THE ANTICIPATED LEVEL OF INFLOWS ON ACCOUNT OF FDI IN OF INFLOWS ON ACCOUNT OF FDI IN RETAIL,THERE MAY NOT BE MUCH RETAIL,THERE MAY NOT BE MUCH REASON TO WORRY.DURING 2000 INDIA REASON TO WORRY.DURING 2000 INDIA ATTRACTED SIGNIFICANTLY LOWER FDI ATTRACTED SIGNIFICANTLY LOWER FDI THAN MANY OTHER SOUTH-EAST ASIAN THAN MANY OTHER SOUTH-EAST ASIAN COUNTRIES,SUCH AS SOUTH COUNTRIES,SUCH AS SOUTH KOREA,THAILAND,MALAYSIA…KOREA,THAILAND,MALAYSIA…

ARGUMENTS IN FAVOUR OFARGUMENTS IN FAVOUR OFFDIFDI

•IT WILL CUT INTERMEDIARIES BETWEEN IT WILL CUT INTERMEDIARIES BETWEEN FARMERS AND THE RETAILERS,THEREBY FARMERS AND THE RETAILERS,THEREBY HELPING THEM GET MORE MONEY FOR THEIR HELPING THEM GET MORE MONEY FOR THEIR PRODUCE.PRODUCE.•IT WILL HELP IN BRINGING DOWN PRICES AT IT WILL HELP IN BRINGING DOWN PRICES AT RETAIL LEVEL AND CALM INFLATIONRETAIL LEVEL AND CALM INFLATION•SMALL AND MEDIUM ENTERPRISES WILL HAVE SMALL AND MEDIUM ENTERPRISES WILL HAVE A BIGGER MARKET ,ALONG WITH BETTER A BIGGER MARKET ,ALONG WITH BETTER TECHNOLOGY AND BRANDING.TECHNOLOGY AND BRANDING.•IT WILL BRING MUCH NEEDED,FOREIGN IT WILL BRING MUCH NEEDED,FOREIGN INVESTMENT INTO THE COUNTRY.INVESTMENT INTO THE COUNTRY.•IT WILL ACTUALLY CREATE EMPLOYMENT THAN IT WILL ACTUALLY CREATE EMPLOYMENT THAN DISPLACE PEOPLE ENGAGED IN SMALL STORES.DISPLACE PEOPLE ENGAGED IN SMALL STORES.

ARGUMENTS AGAINST FDIARGUMENTS AGAINST FDIIT WILL LEAD TO CLOSURE OF TENS OF IT WILL LEAD TO CLOSURE OF TENS OF THOUSANDS OF MOM-AND –POP SHOPS THOUSANDS OF MOM-AND –POP SHOPS ACROSS THE COUNTRY.ACROSS THE COUNTRY.IT MAY BRING DOWN PRICES INITIALLY,BUT IT MAY BRING DOWN PRICES INITIALLY,BUT WILL FUEL INFLATION .WILL FUEL INFLATION .FARMERS MAY BE GIVEN REMUNERATIVE FARMERS MAY BE GIVEN REMUNERATIVE PRICES INITALLY .PRICES INITALLY .SMALL AND MEDIUM ENTERPRISES WILL SMALL AND MEDIUM ENTERPRISES WILL BECOME VICTIMS OF PREDATORY PRICING BECOME VICTIMS OF PREDATORY PRICING POLICIES OF MULTINATIONAL RETAILERSPOLICIES OF MULTINATIONAL RETAILERSIT WILL DISINTEGRATE ESTABLISHED SUPPLY IT WILL DISINTEGRATE ESTABLISHED SUPPLY CHAINS BY ENCOURAGING MONOPOLIES OF CHAINS BY ENCOURAGING MONOPOLIES OF GLOBAL RETAILERS.GLOBAL RETAILERS.

FDI POLICY WITH REGARD TO FDI POLICY WITH REGARD TO RETAILING IN INDIA..RETAILING IN INDIA..

FDI UP TO 100%FOR CASH AND FDI UP TO 100%FOR CASH AND CARRY WHOLESALE TRADING AND CARRY WHOLESALE TRADING AND EXPORT TRADING ALLOWED UNDER EXPORT TRADING ALLOWED UNDER THE AUTOMATIC ROUTE..THE AUTOMATIC ROUTE..FDI UP TO 51%WITH PRIOR FDI UP TO 51%WITH PRIOR GOVERNMENT APPROVAL FOR RETAIL GOVERNMENT APPROVAL FOR RETAIL TRADE OF ‘SINGLE BRAND’ TRADE OF ‘SINGLE BRAND’ PRODUCTS,SUBJECT TO PRESS NOTE PRODUCTS,SUBJECT TO PRESS NOTE OF 2006.OF 2006.FDI IS NOT PERMITTED IN MULTI-FDI IS NOT PERMITTED IN MULTI-BRAND RETAILING IN INDIA…BRAND RETAILING IN INDIA…

THE MAIN OBJECTIVE OF STUDY IS TO THE MAIN OBJECTIVE OF STUDY IS TO KNOW ABOUT IN WHICH SECTOR THE KNOW ABOUT IN WHICH SECTOR THE INDUSTRIES WILL INVEST IN OUR MONEY.INDUSTRIES WILL INVEST IN OUR MONEY.TO IDENTIFY FACTORS WHICH INHIBIT TO IDENTIFY FACTORS WHICH INHIBIT HIGHER FDI OR FII FLOWS AND SUGGEST HIGHER FDI OR FII FLOWS AND SUGGEST REMEDIAL STEPSREMEDIAL STEPSTO EXAMINE POLICY REFORMS TOWARDS TO EXAMINE POLICY REFORMS TOWARDS MERGERS AND ACQUISITION FOR MERGERS AND ACQUISITION FOR ATTRACTING FDI OR FII..ATTRACTING FDI OR FII..

The result of all these efforts are encouraging: the The result of all these efforts are encouraging: the inflow of foreign capital has been steadily rising inflow of foreign capital has been steadily rising year to year so that FDI is better then FIIyear to year so that FDI is better then FIIInvestors based in many countries have taken Investors based in many countries have taken advantage of the India-Mauritius bilateral tax advantage of the India-Mauritius bilateral tax treaty to set up holding companies in Mauritius treaty to set up holding companies in Mauritius which subsequently invest in India, thus reducing which subsequently invest in India, thus reducing their tax obligations. their tax obligations. By industry, the largest destinations for FDI are By industry, the largest destinations for FDI are electrical equipment (including computer software electrical equipment (including computer software and electronics), services, telecommunication & and electronics), services, telecommunication & transportation.transportation.