Foreign Direct Investment in India
Foreign Direct Investment
The Foreign Direct Investment (FDI) in any
country abroad is the net inflow of investment (capital or other), in
order to acquire management control and profit sharing (10% or more
voting stock) or the whole ownership of an accredited company operating
in the country receiving investment. The foreign direct investment
generally encompasses the transfer of technology and expertise, and
participation in the joint venture and management. Highly productive
advantages of foreign direct investment have been constantly being harvested by both governmental and private companies and organizations of all over the world.
The foreign direct investment is profitable both
to the country receiving investment (foreign capital and funds) and the
investor. For the investor company FDI offers an exclusive opportunity
to enter into the international or global business, new markets and
marketing channels, elusive access to new technology and expertise,
expansion of company with new or more products or services, and cheaper
production facilities. While the host country receives foreign funds for
development, transfer of new profitable technology, wealth of expertise
and experience, and increased job opportunities.
Owing to the ever-increasing globalization of businesses of almost
all sectors, liberalization of trade policies, and loosening of foreign
investment restrictions, the foreign direct investment (FDI) has been
quite revolutionary and vital for faster economic growth of most of the
developing and developed countries of all across the world for last few
decades. Supported by refinement in the information and
telecommunication technology, and the increasing trend of Mergers and
Acquisitions, the FDI is to receive tremendous impetus in various
sectors in the future times to come, especially in the developing
countries of the world. It has been observed that more than two-thirds
(2/3th) of direct foreign investment is made in infrastructure,
commercial and residential buildings, machinery, equipment, mines, and
land.
Definition of 'Foreign Direct Investment - FDI'
An investment made by a company or entity based in one country, into a
company or entity based in another country. Foreign direct investments
differ substantially from indirect investments such as portfolio flows,
wherein overseas institutions invest in equities listed on a nation's
stock exchange. Entities making direct investments typically have a
significant degree of influence and control over the company into which
the investment is made. Open economies with skilled workforces and good
growth prospects tend to attract larger amounts of foreign direct
investment than closed, highly regulated economies.
FDI India
The steadily growing one of the major economies of the world,
India has been enjoying huge and regular FDI from diverse investors of
all around the world for the last few decades. According to a recent
UNCTAD (United Nations Conference on Trade and Development) Survey,
India has emerged out as the second most famous and popular destination
in the world for FDI, after China. Majority of this foreign direct
investment in india is made in the sectors of telecommunication,
computer hardware and software, construction, and services, by investor
companies from USA, UK, Singapore, Mauritius, etc.
The foreign direct investment in india can be
made in a variety of ways and in a rather wide range of economic
sectors. Worldwide prominent Global Jurix has been helping individuals,
associations, private and public companies/organizations, and
institutions of diverse sectors for making their cherished FDI in India,
through both the Automatic and Government Routes, for a long time.
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