Presented by :Rubina Isidore

Vibhavari Musale

Surabhi Saxena

Sheetal Chavan

FDI POLICIES IN INDIA

An investment made by a company or entity based in one country, into a company or entity based in another country.

The investing company may make its overseas investment in a number of ways - either by setting up a subsidiary or associate company in the foreign country, by acquiring shares of an overseas company, or through a merger or joint venture.

An example of foreign direct investment would be an American company taking a majority stake in a company in China. Another example would be a Canadian company setting up a joint venture to develop a mineral deposit in Chile.

WHAT IS FDI

Through financial collaborations.. Through joint ventures and technical

collaborations. Through capital markets Through private placements or preferential

allotments.

FOREIGN DIRECT INVESTMENT (FDI) FDI IS PERMITTED AS UNDER THE FOLLOWING FORMS

OF INVESTMENTS –

Arms and Ammunition. Atomic Energy. Railway Transport.

FDI IS NOT PERMITTED IN THE FOLLOWING INDUSTRIAL SECTORS:

A. AgricultureFloriculture, Horticulture, Development of Seeds,

Animal Husbandry, Pisciculture, Aquaculture, Cultivation of vegetables & mushrooms and services related to agro and allied sectors.  

B. Industry

Mining covering exploration and mining of diamonds & precious stones; gold, silver and minerals.

C. Manufacturing Alcohol- Distillation & Brewing

ENTRY ROUTE – 100% AUTOMATIC

1. Tea Sector

2. Broadcasting / Cable

3. Publishing of scientific magazines / speciality journals/periodicals

ENTRY ROUTE - FIPB

FDI IN CURRENT SCENARIO

Declined by six per cent to USD 5.47 billion during January-March quarter  in 2013,  5.84 billion in January-March 2012

Liberalised FDI policy in sectors like multi-brand retail, civil aviation, broadcasting and power exchanges

Maximum FDI from Mauritius, followed by the UK, Singapore, Japan and United States 

FDI IN DIFFERENT SECTORS

Sectors which received large FDI inflows during the period include services, hotel and tourism, metallurgical, construction, automobiles and Pharmaceuticals

Decline in foreign investments could put pressure on the country’s balance of payments and may also impact the value of the rupee.

FDI IN MULTI-BRAND RETAIL

FDI limit in multi-brand retail sector is at 51%

Only 11 states have allowed FDI in the sector

Foreign retailers that want to set up retail stores in India have to mandatorily invest at least 50% of the total FDI brought in has to be invested in 'backend infrastructure' within three years of the first tranche of FDI wherein back-end infrastructure includes capital expenditure on agriculture market produce infrastructure and others

At least $100 million FDI has to be brought in by the foreign investors.

FDI IN INSURANCE SECTOR

Bill to increase FDI limit in insurance from 26% to 49% has been pending in the Rajya Sabha since 2008

But,it remained upto 26% only

TOP INVESTING COUNTRIES

53%11%

9%

7%

5%4% 4%

3% 2% 2% Mauritius

Singapore

USA

UK

Netherlands

Japan

Cyprus

Germany

UAE

France

SECTOR WISE DISTRIBUTION

31%

13%

12%

11%

10%

6%

6%4%

4% 3% Services Sector

Computer Software & hardware

Telecommunications

Housing & real Estate

Construction Activities

Power

Automobile Industry

Metallurgical Industries

Petroleum & Natural Gas

Chemicals

Quality and HygieneInflow of Dollars

Creation of new jobsBenefit to farmers

Increased technical know-howEconomic growth

IMPACT OF FDI IN INDIA

www.investopedia.com http://

www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2513 http://www.investinginindia.in/fdi.htm

REFERENCES