Foreign capital plays a constructive role in a country’s economic development. Sometimes domestically available capital is inadequate for the purpose of various developmental processes. Foreign capital is seen as a way of filling in gaps between the domestically available supplies of savings, government revenue, foreign exchange and the planned investment necessary to achieve developmental targets. This is very true in case of various developing countries like India.
India is the second fastest growing major economy in the world. Indian economy is diverse and encompasses agriculture, handicrafts, manufacturing, textile and a multitude of services. India adopted socialist inspired approach for most of its independent history with the strict
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FDI is not permitted in arms and ammunition, atomic energy, railway transport, coal and lignite, mining of iron, manganese, chrome, gypsum, sulphur, gold, diamond, copper, and zinc. There are many advantages of FDI in India ,like India has a huge market size and a fast developing economy, there is the availability of diversified resources and cheap labor force, increasing improvement of infrastructure, Public private partnerships, IT revolution and English literacy, openness towards FDI and regulatory framework and investment projection.
Figure 1 shows the recent trends in FDI inflows of some developing countries. According to the UNCTAD report of 2011 China has the highest FDI inflows among all the developing countries like Hong Kong, Russia, Singapore, Brazil and India; because China has introduced FDI over 20 years ago and has progressively pursued foreign investment while adjusting its FDI policies. Since 1993, China has attracted the largest amount of FDI of all developing countries while increasing its levels of both exports and technological advancement
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Some researchers focused upon the impact of FDI on the different sectors of the economy like agriculture sector, industrial sector, telecommunication, etc., some researchers paid attention to develop different mathematical and statistical model to analyze the role of FDI in economic development. In this study we have collected the data set from the databank of World Bank and have been matched up against the data available on the site of UNCTAD (United Nations- -Conference on Trade and Development). Above two data sources have been chosen because they are the most reliable sources of data and are used by almost every researcher. The data set consists of FDI inflow (US$ mn) and Percentage growth of GDP (in Service Sector) through FDI. The data set is annual and covers the time period of
...S$1 billion from private equity funds in the year to March 2012. In a market as large as India, that is still far from impressive, but incoming capital is expected to rise in the following year. If it does, it will represent a significant turnaround for a market that foreign private equity investors have largely shunned since the onset of the global financial crisis. Risks associated with Indian real estate investment are considerable, however. As one interviewee puts it, “It’s like China, but more complex in every possible way, without the infrastructure.” Bureaucracy, ubiquitous delays, land acquisition scandals, and an ongoing national protest movement targeting corruption have all contributed to waning foreign interest in Indian markets, with foreign direct investment and portfolio investment dropping markedly despite economic growth of about 8 percent in 2011.
Zheng, P. (2009). A comparison of FDI determinants in China and India. Thunderbird International Business Review, 51(3), 263-279. doi:10.1002/tie.20264
...fferentiation of fields like production, transportation, consumption and so on. Change in them with respect to time indirectly determines the increase in the dependency on machines which in turn gauge the industrial growth of a nation. With reference to above measures, it can be observed that the onset of Industrial Revolution in India was early but very sluggish. India is neither a developed, nor an underdeveloped nation. The ongoing ‘industrial revolution’ has classified it as a developing nation.
I found this article "Foreign direct investment: Companies rush in with the cash" on the financial times website (www.FT.com) published December 11, 2002 written by John Thornhill. The reason for choosing this article is my personal interest in the Chinese economy and its attractiveness to the foreign investors. Apart from the foreign direct investment this topic has also helped me in understanding the impact of Chinese economy on the global market.
In the year 2007, China and India ranked first and second respectively in the list of ideal foreign direct investment (FDI) destinations, according to A T Kearney, a global strategic management consulting firm (The Press Trust of India Limited, 2007a). The two nations, because of their similarities in geopolitical, economic and demographic aspects, are often compared with each other. To determine which one is more attractive for businesses to expand to, this essay will examine the business environment of both countries from the following perspectives: political/legal, economic, socio-cultural and technological.
All throughout history, India has been a place where much wealth and goods filled the country and countless numbers of people came. There has been British influence within the country from being under control of the British, increasing its already diverse nation. For years, there has been many prominent figures that have come from India and had a major influence on others. One of the most influential figures was Mahatma Gandhi, who believed in non-violence and fighting with words only. Just like many of those in America, he fought hard for civil rights. As others did, Asian Indians came to America for new opportunities and live the American Dream. Opportunities in India are harder to come by since the population is the second largest in world,
Woodward, D. (2001). The next crisis?: Direct and equity investment in developing countries. London: Zed Books.
It is well documented that Malaysia is a country that experiences fast and rapid growth in its overall economy. According to the Asian Development Bank (ADB), Malaysia has the potential to rise as one of the seven drivers of the Asian economy by 2050 led by China, India, Indonesia, Japan, South Korea, Malaysia and Thailand (Malaysian Insider, 2011). In the 1970’s, Malaysian companies started to focus on foreign investment but the numbers were still small. These investments started off focusing on banking and finance sectors of developed countries such as the US and Australia. The country only began venturing in outward foreign direct investments (OFDI) in the 1990’s. Malaysia’s OFDI has skyrocketed from a low RM0.45 billion in 1980 to RM10.41 billion in 1997, and further to RM36.7 billion in 2007 (Goh and Wong, 2011). Malaysia has been experiencing a peculiar trend when it comes to foreign investments. The country has encountered a drastic drop in FDI inflows whereas FDI outflow has been increasing at a substantial rate especially in 2007 as seen in the graph. It is worth arguing whether OFDI is a able to substitute domestic investments and will it cause a significant drop in output in the domestic markets (Stevens and Lipsey, 1992). From a different viewpoint, OFDI can also complement domestic markets and increases local industry activities by home country multinationals and, as a result boost up domestic output ( Desai et al., 2005). Therefore, there exist a conceptually causal relationship between OFDI and the domestic economic growth that could result in either way. This essay revolves around the efforts of determining the push and pull factors that influences OFDI and critically analyzing the transition effects of Malaysia to...
The Associated Chambers of Commerce and Industry of India. (2012). India’s Experience with fdI: Role of a Game Changer. Retrieved from http://www.assocham.org/arb/general/Indias_Experience_with_FDI_Role_of_a_Game_Changer.pdf
Vasco da Gama landed at Calicut, sailing via the Cape of Good Hope in 1498. This marked the beginning of
...idering India as one of the options for investing/expanding. Government of India are also taking steps to ease the business in India. For instance deregulating some government owned enterprises, more liberal trade policies, easy and less steps for establishing business in India etcetera.
Export- oriented growth model will improve India’s Balance of Payment and help in accumulating foreign exchange reserves (which is very important given the
The Internet has become a key ingredient of strenuous and busy lifestyle. ‘Internet’ has become the central-hub for communication, explorations, connecting with people or for official purposes. Resultantly, Internet growth has led to a plethora of new developments, such as decreased margins for companies as consumers turn more and more to the internet to buy goods and demand the best prices.
International trade is an economic practice where countries can import and export goods with no concerns to government intervention which includes tariffs and import/export bans or limitations. International trade has several advantages on developing countries; who are nations with low levels of economic resources or low standard of living. Developing countries can advance their economy through strategic free trade agreements. Free trade generally improves the quality of life of poor nations. Nations can import goods that are not easily available within their borders; importing goods may be cheaper for than trying to produce consumer goods. Many developing nations do not have the production procedures available for translating raw materials into valuable goods.
Sri Sathya Sai Baba, an Indian Spiritual leader once said “In this context religion means the religion of love. This is the only religion in the world. There is only one caste, the caste of humanity.” he has highlighted one of the main problems in the Indian culture. Guru Nanak, an Indian Spiritual leader has also said “I am neither a child, a young man, nor an ancient; nor am I of any caste.” This system is suffocated the people that are trapped in it. The caste system is a way to categorize people without their authorization. For example, if a young boy’s father is a servant, the boy too must be a servant. In other words it is your destiny that is picked from birth. That the caste is part of their culture. In this novel a young man discovers