GROUP MEMBERS-

 Ameya Gandhi (13)

 Gurpreet kaur(15)
 Pratik Jain(16)
 Vikramjeet Singh Solar(48)
 Priy Chheda(46)
 Hardik Gala(12)
 Pranali Bavkar(2)
 Harshal Panchal(29)
 Rohit Maingi(19)
 Arshad Ck(54)
 Rushil Gupta(65)
 Jagjit Kaur Wasan(44)
 Sunmeet Matta(22)

1 22/9/2013
 What is

FDI..?
Foreign direct investment (FDI)-
It is a direct investment into production or
business in a country by an individual or
company in another country.
It can be either by buying a company in the
target country or by expanding operations of an
existing buisness in that country.

2 22/9/2013
 6000

5000

4000
US $ million

3000

2000

1000

3 22/9/2013
 Services Sector

4% 4% Computer Software &

6% 3% hardware
6% Telecommunications

Housing & real Estate

10%
Construction Activities
31%
Power
11%
Automobile Industry

Metallurgical Industries
12%
Petroleum & Natural Gas
13%

4 22/9/2C0h13emicals
 2% Mauritius
2%
4% 4% 3%
5% Singapore

7% USA

UK
9% Netherlands

Japan

Cyprus
11%
53% Germany

UAE

France
5 22/9/2013
 Economic
Growth

Linkages and
spillover to
Trad
domestic
firms e

Technology
diffusion and Employment
knowledge and skill levels
6 transfer 22/9/2013
7 22/9/2013
MANUFACTURIN
G SECTOR

8 22/9/2013
 Ranked 2nd most destination for
favored foreign
investments after China

 India ranks among the top 12 producers of manufacturing value

added (MVA).

 In textiles, the country is ranked 4th after China, USA and

Italy.

 In electrical machinery and apparatus, it is ranked 5th.

9 22/9/2013
 6th position in the basic metals category

 7th in chemicals and chemical products

 10th in leather, leather products, refined petroleum products and

nuclear fuel

 12th in machinery and equipment and motor vehicles.

10 22/9/2013
Foreign Direct Investment (FDI) up to 100% is
permitted in all manufacturing activities
except:-

Where more
than 24%
Where the foreign
foreign equity is
Cigars & investor has proposed to
Defense Cigarette an existing be inducted
manufacturi joint for
Industry ng venture in manufactur
India in the e of
same field. items reserv
ed for Small
Scale
11 22/9/2013 sector
12 22/9/2013
13 22/9/2013
14 22/9/2013
 Attracted only Acc to FICCI
67% of China’s
$3.4 billion of Action plan,
total FDI comes
FDI in India can
in the
manufacturing attract
manufacturing
on an average $12billion of FDI
sector compared
every year in the
to 37% in case of
from 2000 to manufacturing
India.
2008 sector per
annum.

15 22/9/2013
India’s share in outward FDI stock is negligible
(Chemicals, Automobiles, Food Processing, Electrical &
Electronic Equipment, Metals and Machinery Equipment)

Sectors like Industrial Machinery, Agricultural

Machinery, Ship Building, Medical & Surgical Devices
and Computer Hardware

Rather India imports these items.

16 22/9/2013
FDI Inflows for Selected Sectors in India
(Jan 2000 to September 2008)
Sector FDI Inflows ($ million)

Ship Building 59.15

Industrial Machinery 283.77

Agricultural Machinery 148.37

Earth Moving Machinery 134.51

Medical and Surgical Appliances 140.77

Computer hardware 99.7

Defence 0.15

17 22/9/2013
 FDI Policy
A concrete and should aim at
comprehensive incentivizing
Action plan maximum value
addition .

Cut ting down

Encourage
the complex
technology
regulatory
transfer by
procedures and
adopting
reducing ‘Swap
delays in the
Technology for
project
Market’ policy
approvals.

18 22/9/2013
FDI IN SERVICE SECTOR

19 22/9/2013
India's large service industry accounts for more
than 50% of the country's GDP.

It makes up more than 25% Employment

Service sectors like telecommunication, IT enabled

services, insurance, air transport are becoming
prominent

20 22/9/2013
Introduction of ‘Manmohanomics’ in 1991

Growing presence of transnational corporations and

the technological progress.

Liberalization of many service sectors activities

(telecom, transport, finance etc.)

21 22/9/2013
Attracted $3.12 billion FDI in the first seven
months of 2009-10

22 per cent of the total FDI inflows of $17.64 billion

in the April-October for service sector

In 2008-09, attracted the maximum FDI worth

USD 6.11 billion.

22 22/9/2013
 FDI Policy in Services
Sector
100% FDI is permitted for many service sectors
like-

(Real estate, Construction, Hotels, tourism, films,

IT - enabled services, Consultancy, Medical,
Education, Advertising, etc)

23 22/9/2013
 Restricted sectors in
Services
Atomic Energy, Lottery Business, Gambling and
Betting, Business of Chit Fund, and any
activity/sector that is not opened to private sector
investment.
Besides the above, FDI is not allowed in
plantations.

24 22/9/2013
Current issues with FDI in Services
Sector
 Very weak linkages of service sector with the
Indian economy (only few cities)
 Requires highly skilled workers
 Employee Welfare in time of crisis

25 22/9/2013
 Allowed up to
100%

Pilot
programme for
Contributes
delivering
subsidy directly 19% to the GDP
to farmer

26 22/9/2013
 To connect 66,800 habitations
 To construct 1,46,000Km of new rural roads
 To Upgrade and modernize 1,94,000Km of existing
rural roads
 To provide corpus of Rs. 8000 crore RIDF(rural
infrastructure development fund)

27 22/9/2013
 FDI in Retail….WHY INDIA?
 Low share of organized retailing
 Increase in disposable income and customer
aspiration or demand.
 Increase in expenditure for luxury items.

28 22/9/2013
 FDI in Retail….Benefits
 Generate huge employment

 Increased investment in technology

 The huge tax revenue generated.

 The consumer gains from the wide variety of choices and

a more diversified basket.

 The indirect benefits like better roads, online marketing,

expansion of telecom sector etc. Will give a ‘big push’ to

other sectors like agriculture, small and medium size
22/9/2013
e2n9terprises
 FDI in Real Estate
 Second-most favoured destination for FDI in
the world
 Norms to allow 100% FDI in Mar 2005 .
 100 acre criterion to 25 acre criterion.

30 22/9/2013
 FDI in Real Estate….Why Invest??
 India produces an estimated 2 million
new graduates
 Presence in the list of top 500 sectors complied
by US taking into consideration of the growth
rate.
 Real estate investments in India yield
huge dividends.

31 22/9/2013
 Tourism
 Raised to $120 million.
 Major source of employment.
 Third largest earner of foreign exchange.
 Private investments through public private
partnership.
 100% FDI permitted.

32 22/9/2013
 Need for FDI in Tourism
 Foreign tourist arrivals are expected to grow to
10 million by 2010-12
 Estimated that tourism in India could contribute
Rs.8,50,000 crores to the GDP by 2020

33 22/9/2013
 Reasons for low FDI
 High Taxes
 Highest import duty on imported liquor used in
hotels
 Service Tax on Tour Operators
 Inland Air Travel Tax

34 22/9/2013
 FDI Policies in
India(overview)
 FDI Policy permits FDI up to 100 % from foreign/NRI
investor without prior approval in most of the sectors. Known
as the automatic route.
 The FDI policies in INDIA are formulated on 4 parameters:
-Increased capital flow.
-Improved technology.
-Management expertise.
-Access to international markets.
 Hence 100% inflow was allowed in sectors like Power,
Renewable energy , Agriculture, mining etc.
 Also sectors like insurance and defence have a cap of 26% and
the banking sector has cap of 49%.
35 22/9/2013
Some of the Major Investing
Countries

36 22/9/2013
 Attract
‘Quality’ FDI

Attract
Increase ease
technology
of doing
and localize
business
production

Target Focus on
specific Export-
sectors oriented FDI
37 22/9/2013
FDI may provide better access to latest technologies for the
local economy.

FDI provides compitition to the local industries which intern

make them compitant. Hence product quality improvement.

The increased flow of FDI in a country has given a major

boost to the country's economy .

Hence measures must be taken in order to ensure that the flow

of FDI in the country to continue to progess in all perspectives.

38 22/9/2013
 THANK YOU

39 22/9/2013