Foreign Direct Investment: Presented by
Foreign Direct Investment: Presented by
Foreign Direct Investment: Presented by
PRESENTED BY:
Sahil Gundevia
CONTENTS:
Introduction to FDI
Types and Methods of FDI
Importance & Barriers to FDI
Advantages & Disadvantages of FDI
Case Study : India
Conclusion
STRATEGIC
ASSETS
SEEKING
Inward Investment
Inward (inflow) is when the foreign
capital are invested in local
resources.
Outward Direction
Greenfield Target
An investment made by a
multinational company in different
nations.
Foreign
Horizont
al Direct
Investm
ent
Vertical
Foreign
Direct
Investm
ent
The most
Resource Seeking
This investment
aimed to get
production factor
supplies at low
cost. The
investment is
seeking access to
existing resources
For e.g. : Indian
low labour cost
important
among these
are:
1. Raw
materials,
2. Labour,
3. Public
incentives
4. The chance
to restrain
MARKET SEEKING
Its aim is to realize a direct presence in the foreign
market to quickly develop sales revenue and control
the marketing mix policy.
METHODS OF FDI
by incorporating a completely owned
subsidiary or company anywhere
by acquiring shares in an associated
enterprise
through a merger or an acquisition of an
unrelated enterprise
participating in an fairness joint venture with
another investor or enterprise
IMPORTANCE OF FDI
BARRIERS TO FDI
Formal restrictions on FDI include
limits on foreign ownership.
Screening and approval procedures.
Informal barriers may also be
important.
Barriers to investment access,
operations, areas, products, ownership
and land use.
Barriers on labor, policy, institutional
and control variables.
Political controversies.
ADVANTAGES OF FDI
New jobs are created
New technology are implemented
Availability of scarce of factory of productions,
products and raw materials
Improving the balance of payment though import and
export substitution
Revenue to the government through taxation
Improved political relations
To get additional expertise
Increase in the number of competition
Expand local business
Stimulate the local economy and thus increasing in
GDP
DISADVANTAGES OF
FDI
Continued.
FDI in Aviation
The latest visionary decision of the Government of India to allow FDI up to 49% in
India's domestic aviation, is expected to heal the cash-strapped aviation industry of
India, and attract massive foreign direct investment in the aviation sector of India,
in short and long future.
The aviation sector of India has been serving about 100 million aviation travellers
every year, both international and domestic markets, in the recent years.
According to RNCOS Report, India is one among the top ten largest markets of the
world, in respect of aviation, and is growing tremendously.
The domestic aviation market of India will emerge out as the third biggest
domestic aviation market in the entire world by 2020 with over 450 million
domestic passengers.
Tata sons- Singapore Airlines, Jet Airways-Etihad deals are spicing up the Aviation
industry in India.
WHY INDIA ?
India is worlds largest liberal democracy with sufficient natural
resources .
India has got skilled labor force.
In India the rate of return on investment is high.
Second largest group of software developer.
Asias fourth largest economy and second largest pharmaceutical
industry.
India has been growing with around 5.5% GDP
India has got an international stand to become the next
permanent member to United Nations Security council
India is an important member of SAARC , WTO, SAFTA and
G-20
India Transformed !!
Yesterday
Slow rate of growth
Bureaucratic
Protected and slow
Small consumer markets
Weak infrastructure
Today
Strong macro economic fundamentals
Encouraging foreign investment
Outsourcing destination
Growing consumerism
Impetus on infrastructure development
Conclusion
Considering foreign
direct investment as an
important measure of a
countrys economic
growth and development
through introduction of
foreign advance
technology which is
beneficial for both
consumer and seller ,it
"If there is one place on the
must be promoted .
face of this Earth where all
As it is generating
the dreams of living men
employment
opportunities it is
have found a home when
dealing with one of the
man began the dream of
most important issue of
References
Websites:
www.globaljurix.com/foreign-direct-investment.php
Scrib.com
wikipedia.org/wiki/Foreign_direct_investment
investorpadia.com
http://www.allbankingsolutions.com/Banking-Tutor/FDI-in- India.htm
News Papers:
Economic Time
Business Line
QUESTIONS ???