Fdi and indian economy pdf

Posted on Friday, March 26, 2021 7:51:14 AM Posted by Melibeo C. - 26.03.2021 and pdf, english pdf 2 Comments

fdi and indian economy pdf

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Apart from being a critical driver of economic growth, Foreign Direct Investment FDI has been a major non-debt financial resource for the economic development of India. Foreign companies invest in India to take advantage of relatively lower wages, special investment privileges like tax exemptions, etc. For a country where foreign investment is being made, it also means achieving technical know-how and generating employment.

Click for PDF. Like several other major economies, the Indian economy has been adversely affected by the lockdowns and market disruptions caused by the COVID pandemic. In these circumstances, valuations and stock prices of Indian companies have witnessed precipitous declines. These revisions are discussed below. There are two routes through which foreign investors may invest in India.

Impact of FDI on Indian Economy-An Analytical Study

Indian economy has reached in the orbit of high rate of economic growth. She is being widely acclaimed and recognized as an emerging global economic power. The rate of growth recorded during the period to clearly showed a tendency of steady upward trend. However, the decade of eighties emerged as a beginning of the high rate of economic growth or at least a dramatic departure from the past growth performance. This tendency had continued in the s and further growth stimulus has occurred in the early 21st century. This paper attempts to unravel the factors behind high growth trajectory and major structural problems encountered by the Indian economy. The question that begs for an explanation is that is high growth and inflows of FDI solve structural imbalance of Indian economy and will it succeed in improving the lot of bottom section of the Indian economy, which are living in abysmally poor socio-economic conditions in the countryside.

Impact of Foreign Direct Investment on Indian Economy

A foreign direct investment FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans". FDI is the sum of equity capital , long-term capital, and short-term capital as shown in the balance of payments. FDI usually involves participation in management, joint-venture , transfer of technology and expertise.

It indicates the size of the economy. It also helps in determining and comparing the growth of economy over different periods and also with that of other economies. Investment is the major factor that contributes to the growth of GDP. Increase in level of investment leads to the multiplier impact on increasing the levels of employment and income. There is significant role of Foreign Investment in open economies. Such investment can be direct or indirect.


PDF | On Apr 8, , Dr. Asha E. Thomas published IMPACT OF FDI ON INDIAN ECONOMY-AN ANALYTICAL STUDY | Find, read and cite all.


Impact of FDI on Indian Economy-An Analytical Study

Investment in India provides the base and pre-requisite for economic growth and development. Developing nations, in particular, consider FDI as the safest type of international capital flows out of all the available sources of external finance available to them. FDI provides a win — win situation to the host and the home countries. Both countries are directly interested in inviting FDI because they benefit a lot from such type of investment.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy. This article aims to focus on the changes that have been brought about in the foreign direct investment regime of India and aims to analyze the potential these change in policy holds particularly in the wake of the global pandemic. In the next half of the year, it has been projected that the Indian economy will likely rebound from the impact of the COVID pandemic and grow by 6.

Impact of FDI on Indian Economy-An Analytical Study

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It is very much vital in the case of underdeveloped and developing countries. A typical characteristic of the developing economies is the fact that these economies do not have the needed level of savings and income in order to meet the required level of investment needed to sustain the growth of the economy. In such cases, foreign direct investment plays an important role in bridging the gap between the available resources or funds and the required resources or funds. It plays an important role in the long-term development of a country not only as a source of capital but also for enhancing the competitiveness of the domestic economy through the transfer of technology, strengthening infrastructure, raising productivity and generating new employment opportunities.

Foreign direct investment in India

COMMENT 2

  • Skip to search form Skip to main content You are currently offline. Edmund C. - 29.03.2021 at 12:26
  • Purpose: There have been many researches on FDI in India and its impact on Indian economy. Our study's purpose is to examine the impact of FDI on not only​. Ovbersilins - 29.03.2021 at 20:27

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