FDI, Bongo

8/9/2019 FDI, Bongo

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8/9/2019 FDI, Bongo


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


8/9/2019 FDI, Bongo


8/9/2019 FDI, Bongo


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


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


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


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


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


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


FDI, Bongo

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