SYNOPSIS

TITLE OF THE PROJECT

“A STUDY ON ROLE OF FDI (FOREIGN DIRECT INVESTMENT) IN INDIA”

INTRODUCTION & OBJECTIVE OF THE STUDY (Max. 200 words)

Introduction
Foreign direct investment (FDI) has played an important role in the process of globalization
during the past two decades. The rapid expansion in FDI by multinational enterprises since
the mid-eighties may be attributed to significant changes in technologies, greater
liberalization of trade and investment regimes, and deregulation and privatization of markets
in developing countries like India. The analysis is fully based on secondary data collected
through different website and journals. The project aims at providing information of present
FDI policy, year wise FDI inflows, sector wise FDI inflows, countries contribution to
maximum of FDI inflows, state wise FDI inflows, trends and patterns of FDI inflows in
different sector, FDI comparison between India and China and so on.

Objectives
The objective of this study is the impact of FDI on developing economies such as India and
current situation of FDI in India, study the current trend of FDI on the global platform,
country that have most important economic value and how companies analyze economies
and accordingly investing those countries and in which sector.
1. To know the performance of Indian stock market.
2. To know the impact of FIIs on Indian stock market.
3. To know the impact of FDIs on Indian stock market.
4. To study the trends and patterns of flow of FDI.
5. To evaluate the impact of FDI on the economy.

STATEMENT OF THE PROBLEM (Max. 500 words)

Problem Statement
The project study has covered broadly the comparison between the future of FDI along with
its impact both on the India economy as well as on the pocket of middle class people. The
project have also cover the advantage & disadvantage of FDI such as style of business in
respect to infrastructure changes, improvement in goods and services and cost effect and
impact of FDI in retail sector, and how the job opportunity increasing by FDI in India.

There are many factors that influence the economic condition. One of them is FDI. Hence
there is a need to study the impact of FDI on the change in economy. A large number of
changes that were introduced in the country’s regulatory economic policies heralded the
liberalization era of the FDI policy regime in India and brought about a structural
breakthrough in the volume of the FDI inflows into the economy maintained a fluctuating

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and unsteady trend during the study period. It might be of interest to note that more than 50%
of the total FDI inflows received by India came from Mauritius, Singapore and the USA.

Literature Review

Bruce A. Blonigen: This paper surveys the recent burgeoning literature that empirically
examines the foreign direct investment (FDI) decisions of multinational enterprises (MNEs)
and the resulting aggregate location of FDI across the world. The contribution of the paper is
to evaluate what we can say with relative confidence about FDI as a profession, given the
evidence, and what we cannot have much confidence in at this point. Suggestions are made
for future research directions.

Hugo Rojas-Romagosa: Foreign Direct Investment (FDI) flows have increased substantially
in the past two decades. These developments have motivated the appearance of a large
number of empirical papers that test the expected benefits that FDI inflows are assumed to
bring to the host countries. We survey the recent theoretical and empirical literature, but
restrict our attention to the productivity changes that are induced by increased FDI inflows.
We review both the aggregate productivity effects, as well as the spillover effects of FDI on
local firms.

Karimullah: The article examines the impact of foreign institutional investor s FII equity
investment behavior in the Indian stock market. It attempts to find out the two-way causality
between foreign institutional investors (FIIs) behavior and performance of Indian stock
market for the period of January 1997 to June 2007.this article seeks to examine the idea that
financial liberalization induces increased efficiency in the financial market as permission of
FIIs equity investment is an important example of financial liberalization. Return in the stock
market is used as proxy for the efficiency of the stock market in India .granger causality test
has been applied to test the bidirectional causality. But we did not find strong evidence that
the variations in the stock market indices are determined by FIIs investment behavior

RESEARCH METHODOLOGY (Max. 500 words)

TYPE OF RESEARCH:
This project will be considered as an analytical research. Analytical Research is defined as
the research in which, researcher has to use facts or information already available, and
analyze these to make a critical evaluation of the facts, figures, data or material.

RESEARCH DESIGN:
The research design is a pattern or an outline of a research project. It is a statement only the
essential of a study those provide the basic guidelines for the detail of the project. The
present study being conducted follows a descriptive research design has the data would be
responses from a simple containing g a large numbers of sources. It is a cross section of the
situation design of the descriptive studies including the nature and the analytical method. The
research design will be used in this study is both ‘Descriptive’ and ‘exploratory’.

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RESEARCH PROBLEM
Financial statement is a collection of data organized according to logical and consistent
accounting procedure to convey an under-standing of some financial aspects of a business
firm. It may show position at a moment in time, as in the case of balance sheet or may reveal
a series of activities over a given period of time, as in the case of an income statement. Thus,
the term ‘financial statements’ generally refers to the two statements.
(1) The position statement or Balance sheet.
(2) The income statement or the profit and loss Account.

SOURCE OF RESEARCH DATA:

There are mainly two through which the data required for the research is collected.

1. PRIMARY DATA: The primary data is that data which will be collected fresh or
first hand, and for first time which is original in nature. In this study the Primary data
will be collected from Questionnaire and Personal Interaction with Finance manager
and other staff members.

2. SECONDARY DATA: The secondary data are those which have already collected
and stored. Secondary data easily get those secondary data from records, annual
reports of the company etc. It will save the time, money and efforts to collect the data.
The major source of data for this project will be collected through annual reports,
profit and loss accounts, some more information collected from internet, journals and
text books.

SAMPLING DESIGN
Sampling is an effective step in collection of primary and secondary data and has a great
influence on the quality of the results. The sampling plan includes population, sample size
and sample design.

TOOLS USED FOR ANALYSIS OF DATA

The data will be analyzed using the following financial tools. They are
 Ratio analysis.
 Statement of changes in working capital.

DATA ANALYSIS & INTERPRETATION

Classification & tabulation transforms the raw data collected through questionnaire in to
useful information by organizing and compiling the bits of data contained in each
questionnaire i.e., observation and responses are converted in to understandable and orderly
statistics will be used to organize and analyze the data.

LIMITATIONS
Every project reports have certain limitations and the present study is no more exception.
These are:
 The lack of information sources for the analysis part.

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  The time constraint may be one of the major problems.
 Getting accurate responses from the respondents due to their inherent Problems, per-
sonality traits, and mood fluctuations may be very difficult task.
 Some respondents may be re-contacted as per their convenience of time.
 Some data may be given by the staffs might be not proper. Like their contact number
& address, etc.
 As the time available will be limited and the subject is very vast.
 It is mainly based on the data available in various websites & other secondary sources
 The inferences made is purely from the past year’s performance;
 There is no particular format for the study;
 Sufficient time is not available to conduct an in-depth study; the study is conducted in
a short period, which may be not detailed in all aspects.
 Non-availability of accurate data to FDI
 Data in one secondary source do not match with that of another source.

REFERENCES

BOOKS:-
 Foreign Investment in India: 1947-48 to 2007-08, Dr. Kamlesh Gakhar
 Foreign Direct Investment in India: 1947 to 2007, Dr. Nitin Bhasin
 PRATIYOGITA DARPAN ECONOMY EDITION
 Business environment (Suresh Bedi)
 The Journal of Amity Management Analyst (Jan. June 2007)
 The Journal of Business ,vol.59,no.3, 383-403.
 The Journal of Finance India
 Apeejay journal of management and technology.(Jan 2009)
 JIMS 8M April June 2007

INTERNET:-
 www.dipp.nic.in
 www.commerce.nic.in
 www.finmin.nic.in
 www.india.gov.in
 www.rbi.org.in
 www.wikipedia.org
 www.docs.google.com
 www.nse.india.com
 www.sebi.co.in
 www.onlinestockholding

MAGAZINES
 Business world
 India Today
 Business today, etc.