56 CHAPTER-3 TRENDS AND PATTERN OF FDI Introduction Chapter 3 of the research study consists of the analysis of the trends and pattern of FDI-country- wise and year-wise. Here, different schedules have been prepared in order to know about the flow of FDI during pre-liberalisation and post- liberalisation period. The inflow and outflow of FDI before 1991 and after 1991 is viewed in a sequence systematically so that the importance of FDI in India can be established carefully and the future of FDI can be forecasted there from. The top investing countries of Asia are studied and their comparison has been made of in the light of FDI inflows and outflows. Moreover, apart from the above said information, the different sectors where FDI is permitted upto a certain extent/limit are also studied here, carefully. India stands today as the largest democratic country in the world. Its political and administrative set up has many flows and shortcomings. The Indian administrative system and governance infused with the flows like shortcomings of power, bureaucratic barriers, political uncertainty and infrastructural deficiencies. In spite of all these, India became one of the most attractive grounds for wealthy European and American investors. Since independence till 1990, the performance of Indian economy has been dominated by a regime of multiple controls, restrictive regulations and wide ranging state intervention. In 1991, India’s liberalization has acquired a revolutionary status as a time of change in the planning of India’s future. India has been ranked at the second place in global FDI in 2010 and will continue to remain among the top five attractive destinations for international investors during 2010-12 period. India is the 3 rd largest economy of the world in terms of purchasing power parity and, thus, looks attractive to the world of FDI. Even government of India has been trying hard to do away with FDI caps for majority of the sectors. But there are still some critical areas like retailing and insurance where there is a lot of opposition from local Indians and Indian companies. FDI in India is subjected to certain rules and regulations and is subject to predefined limits in various sectors which range from 20% to 100%. There are also some sectors in which FDI is prohibited. The FDI limitance reviewed by the government from time to time and as and when the need is
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56
CHAPTER-3
TRENDS AND PATTERN OF FDI
Introduction
Chapter 3 of the research study consists of the analysis of the trends and
pattern of FDI-country- wise and year-wise. Here, different schedules have been
prepared in order to know about the flow of FDI during pre-liberalisation and post-
liberalisation period. The inflow and outflow of FDI before 1991 and after 1991 is
viewed in a sequence systematically so that the importance of FDI in India can be
established carefully and the future of FDI can be forecasted there from. The top
investing countries of Asia are studied and their comparison has been made of in the
light of FDI inflows and outflows. Moreover, apart from the above said information,
the different sectors where FDI is permitted upto a certain extent/limit are also studied
here, carefully.
India stands today as the largest democratic country in the world. Its political
and administrative set up has many flows and shortcomings. The Indian
administrative system and governance infused with the flows like shortcomings of
power, bureaucratic barriers, political uncertainty and infrastructural deficiencies. In
spite of all these, India became one of the most attractive grounds for wealthy
European and American investors. Since independence till 1990, the performance of
Indian economy has been dominated by a regime of multiple controls, restrictive
regulations and wide ranging state intervention. In 1991, India’s liberalization has
acquired a revolutionary status as a time of change in the planning of India’s future.
India has been ranked at the second place in global FDI in 2010 and will continue to
remain among the top five attractive destinations for international investors during
2010-12 period.
India is the 3rd
largest economy of the world in terms of purchasing power
parity and, thus, looks attractive to the world of FDI. Even government of India has
been trying hard to do away with FDI caps for majority of the sectors. But there are
still some critical areas like retailing and insurance where there is a lot of opposition
from local Indians and Indian companies. FDI in India is subjected to certain rules and
regulations and is subject to predefined limits in various sectors which range from
20% to 100%. There are also some sectors in which FDI is prohibited. The FDI
limitance reviewed by the government from time to time and as and when the need is
57
felt and FDI is allowed in some new sectors where the limits of investment in the
existing sectors are modified accordingly. In order to revise the FDI limits to attract
more foreign investment in India, the Union government constituted a committee
named, Arvind Mayaram Committee headed by the Economic Affairs Secretary. The
government of India on July 16, 2013 approved the recommendation of the committee
to increase the limits of FDI in 12 sectors out of proposed 20 sectors. The major
policy decision taken at meeting convened by P.M. Manmohan Singh for boosting the
flow of foreign funds in the light of depreciating rupee against the dollar and bid to
turn around declining investor sentiments.
Investing Across Borders- Sector wise Caps- 2010
This table explains investing across borders in various sectors. These sectors
are Mining Oil & Gas, Agriculture and forestry, Light Manufacturing,
Telecommunications, electricity, banking, insurance and transportation in different
countries.
58
Table 3.1
Investing Across Sectors
Foreign Equity Ownership Indexes
Country Mining
Oil &
Gas
Agriculture
And forestry
Light
Manufacturing
Telecomm-
unications
Electricity Banking Insurance Transportation Media Construction,
TOTAL 134.818 358.772 798.077 27,331 25,834 21,383 35,121 19,103 190,083 *Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI, Economic Survey, Monthly Bulletins of Reserve Bank of India, Press
Notes issued by the DIPP, Ministry of Commerce and Industry, Government of India.
78
The Table 3.9 reveals that cumulative inflow of FDI in India is US$ 190083
Million in the Post liberalization period upto 2012-13 from various countries. In this
period Mauritius has topped as the main source of FDI inflow in India with a major
cumulative Percentage share of 38% but Percentage share in is decreased from
41.08(2008-09) to 28.31(2011). Whereas UAE has lowest rank out of these 10
countries having 1% share in cumulative total FDI inflow in the same period. UK and
USA had significant amount of FDI inflows in the period. Prior to 2008-09 thereafter
quantum of their FDI inflow was not significant. There is no consistency in the trend
of total FDI inflows from these countries except Netherlands during the period under
reference. Since, Mauritius got 1st rank as it’s total FDI flow is more since 2008-09 to
2012-13 as compare to FDI inflow of other countries. Table further shows that FDI
inflow from all the countries in 2012-13 has decreased as compare to FDI inflow of
2011-12 but trend of FDI inflow from Netherlands is increasing. As far as total
amount of FDI inflow from various countries is maximum in the year 2011-12 in
comparison to remaining period. Total amount of FDI inflow of US$ 35,121 Million
with 18.48% share in cumulative FDI inflow upto January 2013 is the highest as
compare to other periods.
Top Investing Countries FDI Outflows during Post Liberalization Period
There are many countries which are investing in other countries in the form of
foreign direct investment during Post-liberalization period. The outflow of FDI in
India during Post-liberalization period is given in table 3.10.
Table 3.10
Top Investing Countries FDI Outflows during Post Liberalization Period
*Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI, Economic Survey, Monthly Bulletins of Reserve Bank of India, Press
Notes issued by the DIPP, Ministry of Commerce and Industry, Government of India.
Year Wise FDI Inflows in Asian Countries during Pre-Liberalization
718 542
1330
62 98
1058
35
264
42 75
4224
6.57 China
Hongkong
Singapore
India
South Korea
Malaysia
Phillipines
Thailand
Sri Lanka
81
Table 3.12
Year Wise FDI Inflows in Asian Countries during Post-Liberalization
Total 1329.095 702.543 436.887 247.334 114.842 112.68 33.643 112.704 7.158 32.749 3129.635 100.00 *Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI, Economic Survey, Monthly Bulletins of Reserve Bank of India, Press
Notes issued by the DIPP, Ministry of Commerce and Industry, Government of India.
82
Year Wise FDI Inflows in Asian Countries during Post-Liberalization
The Table 3.11 indicates that total FDI inflows of US$ 64,315 Million was
made in all the Asian countries during the pre-liberalization period in which
Singapore has maximum share of 28.83 % followed by China with 23.39% share in
the total FDI inflow. These both Asian countries got the same rank in the year 1988,
1989 and 1990 in terms of total amount of FDI inflows. India could contribute only
US$ 864 Million with 1.34% share which is more than only one Asian country i.e. Sri
Lanka. Hence, position of India in this regard is not satisfactory during this period
under reference as far as year wise analysis is concerned total FDI inflow of US$
16012 Million with 24.89% share was made in the year 1990 where as minimum FDI
inflow of US$ 4224 Million with 6.57% share was marked during 1982-85. Since
1982-85 to 1990 total amount of FDI inflows shows an increasing trend every year
during the pre-liberalization period. In 1986 China got 1st rank followed by Singapore
whereas in 1987 Hongkong got 1st position which was followed by Singapore.
4.366
11.156
27.515
33.787
35.849
40.18
44.236
45.463
40.319
40.715
46.878
52.743
53.505
60.63
72.406
72.715
83.521
108.312
95
114.734
123.985 121.08
1329.095
China
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
83
Table 3.12 shows that total FDI of US$ 3129.635 Million were made in 10
Main Asian Countries in the post reforms period during 1991 to 2012. In the total
amount of Maximum FDI has been shared by China i.e. 42.47% during this period of
22 years and Hongkong got 2nd
rank in this regard. Whereas minimum FDI inflow
was made towards Sri Lanka amounted US$ 7.158 having .23% share in total FDI
inflows. As far as our country India is concerned a total amount of US$ 247.334
Millions FDI was made which is 7.9% in total FDI inflows. In this post-liberalization
period highest amount of FDI inflow is made in the year 2011 which is followed by
all these countries in the year 2012. But minimum FDI inflow was US$ .57 and .78
Million in the year 1991 and 1992 respectively during the initial stage of post reforms
period. Table again reveals that India got 4th
rank among these 10 Asian Countries.
India has 59.77% of share in total FDI inflows of South Korea, Malaysia, Phillipines ,
Thailand , Sri Lanka and Pakistan but 10% share in total FDI of Hongkong, China and
Singapore. Table further reveals that only China has an increasing trend of FDI
inflows during a maximum period of 18 years i.e. 1991 to 2008. Whereas other
countries have an increasing trend of FDI inflows for a period of maximum 5 or 6
years generally in the initial years. But trend of FDI inflow in other Asian Countries is
fluctuating in this regard.
Year Wise FDI outflows in Asian Countries during Pre-Liberalization
There are various countries which are contributing in Asian countries during
Pre-liberalization. Year Wise FDI outflows in Asian Countries during Pre-
Liberalization is presented in table 3.13.
84
Table No. 3.13
Year Wise FDI Outflows by Asian Countries during Pre-Liberalization
(Amount in US$ Millions)
Countries 1984-89
(Annual
Average)
1990 Total Percentage
China .581 .830 1.411 13.87
Hongkong 1.833 2.448 4.281 42.07
Singapore .286 2.034 2.320 22.80
India .005 .006 .011 .11
South Korea .137 1.056 1.193 11.71
Malaysia .233 .532 .765 7.52
Phillipines .004 -.005 -.001 0
Thailand .041 .140 .181 1.78
Sri Lanka .001 .001 .002 .02
Pakistan .010 .002 .012 .12
Total 3.131 7.044 10.175 100 *Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI,
Economic Survey, Monthly Bulletins of Reserve Bank of India, Press Notes issued by the DIPP,
Ministry of Commerce and Industry, Government of India.
Table 3.13 contains the data of FDI inflows for two period only during the pre-
liberalization period i.e. annual average FDI inflows from 1984-89 and for the year
1990.On the basis of these date table reveals that during 1984-89 maximum FDI
outflow was made by Hongkong amounted US$ 1.833 Million out of total Average
FDI outflow with 58.54% share which is followed by China with 18.56 percentage
share where as minimum FDI outflow was made by Sri Lanka. In the year 1990 also
maximum FDI outflow was made by Hongkong with 34.75% followed by Singapore.
Whereas in 1990 also minimum FDI outflow was also made by Sri Lanka in 1990.
Table further depicts that during the pre-liberalization period Hongkong, Singapore
and China have 1st , 2
nd and 3
rd rank respectively out of these 10 Asian countries but
Phillipines and Sri Lanka have lowest position in total of FDI outflows. During this
period Rank of India in total FDI outflow was not satisfactory.
Year Wise FDI outflows in Asian Countries during Post-Liberalization
There are various countries which are contributing in Asian countries during
Post-liberalization. Year Wise FDI outflows in Asian Countries during Post-
Liberalization is presented in table 3.14
85
Table 3.14
Year Wise FDI Outflows in Asian Countries during Post-Liberalization
*Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI, Economic Survey, Monthly Bulletins of Reserve Bank of India, Press
Notes issued by the DIPP, Ministry of Commerce and Industry, Government of India.
86
Table 3.14 indicates that US$ 1982.078 million FDI outflow was made by
these 10 Asian Countries during the post- liberalization period from 1991 to 2012. As
per these data maximum FDI outflow was made by Hongkong amounted US$
826.295 million with 41.69 share in total amount, whereas China and Singapore got
2nd
and 3rd
rank respectively in this regard. But Sri Lanka could contribute minimum
FDI outflows with .023% share in total FDI outflows during this period under
reference. As far as year wise data is concerned highest amount of FDI outflow with
13.31% share was made in the year 2012 as compare to earlier years. But these
countries could contribute minimum amount of FDI outflows in the initial years
during the same period of 22 years. Table 3.15 depicts that China has increasing trend
of FDI outflow in a maximum period of 10 years at the end (during2003 to 2012). But
Hongkong, Singapore, India, South Korea, Malaysia and Thailand has increasing
trend for a period of approximately 5 to 6 years in the initial stage (1991-2000) where
as Malaysia and Thailand show increasing trend in approximately 6 to 7 years during
2001 to 2012. Table further reveals that India has 5th
Rank with 5.82% share in total
FDI outflow during the period of study under reference. Table also indicates that all
these 10 Asian Countries could contribute only 17.27% in total FDI outflows during
first 10 years of Post-liberalization period i.e. 1991 to 2000 where as 82.73% of total
FDI outflow was made by these countries in last 12 years i.e. 2001 to 2012. India is
leading Asian Country in this regard.
87
Sectoral Distribution of the Stock of FDI in India during Pre-liberalization
Period
This table explains stock in various sectors in India. Table 3.15 explains a
brief account of FDI in India at the end of Financial Years 1964, 1974, 1980 and 1990
regarding distribution of FDI in some important sectors.
Table 3.15
Sectoral Distribution of the Stock of FDI in India during Pre-liberalization
(Rs Crores = 10 million) Industry March 1964 March 1974 March 1980 March 1990
A. Plantation 105.6
(18.7)
107.2
(11.7)
38.5
(4.1)
256
(9.5)
B. Mining
4.7
(0.9)
6.4
(0.8)
7.8
(0.8)
8.0
(0.3)
C. Petroleum
143.3
(25.3)
137.9
(14.7)
36.8
(3.9)
3.0
(0.1)
D. Manufacturing
229.3
(40.5)
625.6
(68.4)
811.6
(86.9)
2298
(84.9)
i. Food and
Beverages.
30.2
(13.2)
52.1
(8.3)
39.1
(4.8)
162
(7.0)
ii. Textile Products
16.6
(7.2)
35.6
(5.7)
32.0
(3.9)
92
(4.0)
iii. Machinery and
Machine Tools
15.7
(6.8)
42.1
(6.7)
71.0
(8.8)
354
(15.4)
iv. Transport
Equipment
15.0
(6.5)
32.1
(5.1)
51.5
(6.3)
282
(12.3)
v. Metal and Metal
Products
33.1
(14.4)
86.7
(13.9)
118.7
(14.7)
141
(6.1)
vi. Electrical Goods
18.2
(7.9)
68.1
(10.9)
97.5
(12.0)
295
(12.8)
i. Chemical and
Allied Products
60.1
(26.2)
203.7
(32.6)
30.8
(37.2)
769
(33.4)
ii. Miscellaneous
40.4
(17.6)
105.0
(16.7)
100.0
(12.3)
203
(8.8)
E. Services
82.3
(14.6)
39.8
(4.4)
38.5
(4.1)
140
(5.2)
Total
565.5
(100.0)
916.9
(100.0)
933.2
(100.0)
2705
(100.0)
*Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI,
Economic Survey, Monthly Bulletins of Reserve Bank of India, Press Notes issued by the DIPP,
Ministry of Commerce and Industry, Government of India.
Note: Figures in parenthesis show percentage from the total.
Table 3.15 reveals that manufacturing sector has highest share of 40.5%
followed by petroleum sector with 25.3% where as mining sector has minimum share
of 0.9%. Table depicts the same trend in the year 1974 by the manufacturing sector. It
is evident from the table that manufacturing sector again got highest share of 86.9%
and followed by plantation and service sector with the same equal share of 4.1% but
minimum share of 0.8% is marked by mining sector. In 1990 also manufacturing
88
sector has highest share of 84.9 followed by plantation sector but mining sector has
minimum share of 8.1 % FDI inflow. Table further shows that mining and petroleum
sector show decreasing trend during this period whereas manufacturing sector shows
increasing trend upto march 1980 and decreased in 1990. Trend of service sector
regarding FDI inflow is decreasing upto 1980 with minor increment in 1990.
Maximum FDI inflow was made in chemical & allied products and minimum FDI in
textile products by the manufacturing industry during this period under reference.
Sectors Attracting Highest FDI Equity Inflows during Post-liberalization Period
This table explains stock of FDI in top ten sectors in India. Table 3.16 reveals
a brief account of FDI during Post-liberalization period upto 31.03.2014 regarding
distribution of FDI in some important sectors out of total sectors in which FDI is
permitted in India.
89
Table 3.16
Sectors Attracting Highest FDI Equity Inflows during Post-liberalization Amount in Rs. Crores (US$ in million)
There are various Regional offices of RBI governing the different states of our
country in respect of FDI equity inflows from the year 2000 to 2013. Total no. of
Regional offices of RBI governing the different states of our country in respect of FDI
equity inflows from the year 2000 to 2013 is presented in table 3.17
91
Table 3.17
RBI’s Regional Office-Wise Financial-Year Wise FDI Equity Inflows April, 2000 To January, 2013
(Amount in Rs. Crore & US$ million) Sr.
No.
Regional
Offices of RBI
States Covered Upto March,
2009
2009-10 2010-11 2011-12 2012-13 Cumulative
(April 2000- Jan 2013)
%age to
Total Inflows
1 MUMBAI MAHARASHTRA,
DADRA & NAGAR
HAVELI, DAMAN &DIU
134,393
(30,722)
39,409
(8,249)
27,669
(6,097)
44,664
(9,553)
40,909
(7,523)
287,044
(62,144)
33
2 NEW DELHI DELHI, PART OF UP
AND HARYANA
55,308
(12,717)
46,197
(9,695)
12,184
(2,677)
37,403
(7,983)
17,020
(3,135)
168,112
(36,207)
19
3 BANGALORE KARNATAKA
25,672
(5,868)
4,852
(1,029)
6,133
(1,332)
7,235
(1,533)
4,342
(799)
48,234
(10,561)
6
4 CHENNAI TAMIL NADU,
PONDICHERRY
21,079
(4,725)
3,653
(774)
6,115
(1,352)
6,711
(1,422)
11,850
(2,176)
49,408
(10,449)
6
5 AHMEDABAD GUJARAT
24,523
(5,625)
3,876
(807)
3,294
(724)
4,730
(1,001)
2,470
(455)
38,893
(8,612)
5
6 HYDERABAD ANDHRA
PRADESH
15,639
(3,496)
5,170
(1,203)
5,753
(1,262)
4,039
(848)
5,635
(1,037)
36,236
(7,846)
4
7 KOLKATA WEST BENGAL,
SIKKIM, ANDAMAN &
NICOBAR SLANDS
5,411
(1,278)
531
(115)
426
(95)
1,817
(394)
1,938
(354)
10,123
(2,236)
1
8 CHANDIGARH CHANDIGARH,
PUNJAB,HARYANA,
HIMACHAL PRADESH
1,756
(385)
1,038
(224)
1,892
(416)
624
(130)
182
(33)
5,492
(1,188)
1
9 BHOPAL MADHYA PRADESH,
CHATTISGARH
1235
(277)
255
(54)
167
(37)
2,274
(471)
342
(63)
4,273
(902)
0.5
10 KOCHI KERELA,
LAKSHADWEEP
884
(203)
606
(128)
167
(37)
2,274
(471)
342
(63)
4,273
(902)
0.5
11 PANAJI GOA 1,141
(253)
808
(169)
1,376
(302)
181
(38)
43
(8)
3,549
(770)
0.4
12 JAIPUR RAJASTHAN 2067
(438)
149
(31)
230
(51)
161
(33)
556
(102)
3,163
(655)
0.3
13 BHUBANESHWAR ORISSA 437
(97)
702
(149)
68
(15)
125
(28)
285
(52)
1,617
(341)
0.2
92
14 KANPUR UTTAR PRADESH,
UTTRANCHAL
72
(17)
227
(48)
514
(112)
635
(140)
136
(25)
1,584
(342)
0.2
15 GUWAHATI ASSAM, ARUNACHAL
PRADESH, MANIPUR,
MEGHALAYA,
MIZORAM,
NAGALAND, TRIPURA
228
(53)
51
(11)
37
(8)
5
(1)
27
(5)
348
(78)
0
16 PATNA BIHAR, JHARKHAND 1
(0)
0
(0)
25
(5)
123
(24)
41
(8)
190
(37)
0
17 REGION NOT INDICATED 100,149
(22,496)
15,056
(3,148)
29,344
(6,447)
53,851
(11,399)
17,325
(3,172)
215,725
(46,662)
24.6
Sub Total 389,426
(88,521)
122,580
(25,834)
97,320
(21,383)
165,146
(35,121)
103,956
(19,103)
878,429
(189,962)
100
18 RBI’S – NRI SCHEMES
(from 2000 to 2002)
533
(121)
0 0 0 0 533
(121)
-
GRAND TOTAL 389,960
(88,642)
122,580
(25,834)
97,320
(21,383)
165,146
(35,121)
103,956
(19,103)
878,962
(190,083)
-
*Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI, Economic Survey, Monthly Bulletins of Reserve Bank of India, Press
Notes issued by the DIPP, Ministry of Commerce and Industry, Government of India.
.
93
Table 3.17 indicates the total no. of Regional offices of RBI governing the
different states of our country in respect of FDI equity inflows from the year 2000 to
2013. Table shows that upto 2009 foreign investors have shown their maximum
interest in Mumbai region by investing US $ 62,144 millions for investment with 33%
of total FDI equity inflows. After that their IInd & IIIrd choice for investment was
New Delhi and Banglore Region respectively. But Patna could invite least amount of
FDI inflows in this period. From year 2009 to 2013 also Foreign investors have shown
their attraction towards Mumbai Region investing US $ 62,144 million with highest
share of 33% in total FDI Equity inflows which was followed by New Delhi and
Banglore Region with 19% share and 6% share respectively. During this period
minimum amount of FDI Equity inflows was enjoyed by Patna and Guwahati Region
with US $ 37 million and US $ 78 million respectively. In this journey of 13 years
total amount of US $ 121 million were invested under RBI’s NRI Schemes. Table also
reveals that Chennai Region has an increasing trend of FDI Equity Inflows during last
4 years from 2009-10 to 2012-13 but Bhuvaneshwar Region also shown increasing
trend during last 3 years from 2010-11 to 2012-13. All others regions have fluctuating
trend regarding FDI Equity Inflows during this period under reference.
FDI Inflows and Outflows by Region/ Economy
Different countries contributed in FDI during Pre-Liberalization and Post-
Liberalzation periods. The table 3.18 describes the Region/Economy wise FDI inflow
and outflow for the pre-liberalization and post-liberalization period.
*Source: Compiled from Various Reports of OECD, UNCTAD, World Bank, Fact Sheets of FDI, Economic Survey, Monthly Bulletins of Reserve Bank of India, Press
Notes issued by the DIPP, Ministry of Commerce and Industry, Government of India.
96
It is clear from the table 3.18 that Developed Economies have got maximum
share in FDI inflows and outflows at inter-national level which is followed by Europe
and European Economy in the pre-liberalization period and post-liberalization period.
On an average FDI inflow and FDI outflow have been increased in 1990 as compare
to average amount of FDI inflows of 1984-89 except FDI inflow of Africa and FDI
outflow of West Asia. During 1991-2000 table shows an increasing trend in FDI
inflow and outflow (except China) but trend of FDI inflow and outflow is decreased
during 2006-2012 in economies of Developed nations, Europe and European Union.
Whereas trend of FDI inflow and outflow in majority of the other economies has
increased during 2001 to 2011 but decreased in 2012. The same trend has being
shown by the economy of the world in this regard during the period of study under
reference. Table further shows that Developing Economies has increasing trend of
both FDI inflow and outflow during the pre-liberalization and post- liberalization
period with the exception of inflow of 2012.
Conclusion
Chapter 3 concludes that there are certain areas where on the one hand, FDI is
prohibited and on the other hand, in the certain other areas, FDI is permitted upto the
extent of 100%. From time to time, these limits have been revised. At the time of
Independence, there was a total foreign investment worth Rs.28.8 million, which
within next one decade, grew around 98% and FDI consisted 92.46% of the total of it.
Economic reforms of 1991 viewed that total FDI worth Rs. 453.1 million. And during
the post-liberalisation period, FDI was just US$ 97 million in 1990-91 which
increased US$ 26953 million in 2013 with a rise of approximately 278 times. It also
states about the positions of various developed and developing economies where it
concludes, that developed economies have 40.09% inflow as compared to the
minimum share of 0.19% inflow towards least developed economies. It also describes
that during pre-liberalisation period, USA occupied the top position among the world
which has the highest inflow of capital in India whereas Mauritius grabbed this status
of USA during the post-liberalisation period. On the same terms, maximum FDI
outflow was also made by USA till date. Among the different sectors, manufacturing
sector has the maximum and highest share in FDI inflows during Pre-liberlization and
Post-liberalization periods whereas petroleum sector and hotel & tourism sector have