Professional Documents
Culture Documents
On Foriegn Direct Investment
On Foriegn Direct Investment
On Foriegn Direct Investment
Group-4
Akanksha Yadav
Meenal Arora
Rahul Bohra
Chinmaya Kumar Parija
Foreign Direct Investment in India
INTRODUCTION
FDI occurs with the purchase of the
“physical assets or a significant amount
of ownership (stock) of a company in
another country in order to gain a
measure of management control.”
WHY FDI IS NEEDED ?
• Gain a foothold in a new geographic
market.
• Increase a firm’s global competitiveness
and positioning.
• Fill gaps in a company’s product lines in a
global industry.
• Reduce costs in such areas as R&D,
production, and distribution.
Investing in India – Entry Routes
Investing in India
Prior Permission
Automatic Route
(FIPB)
• Atomic energy
• Lottery business
Manufacturing
• 100% FDI permitted in all activities under automatic route
except:
– Defence products
• FDI upto 26% - FIPB subject to licensing of Arms and Ammunitions
FDI Policy for Industry Sector…. Fully permitted
Mining
• Coal – FDI upto 100% as per Coal Mines (Nationalization) Act 1977
• Diamond, Gold, Silver , Minerals – upto 100% under automatic route as
MMRD Act
• Atomic minerals – upto 74% in JV with PSUs – FIPB
Electricity
• FDI upto 100% under automatic route in Generation, Transmission,
Distribution and Power Trading as per Electricity Act 2003
FDI Policy for Service Sector…. Largely permitted
9000
7722 7404
8000
(Only
Equity)
7000
6130
6000
5035 6051
US $ m
5000
4322
4000 4029
3000
2000
1000
0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006 Apr - Nov
2500
1000
500
0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006 April Nov
4012
FDI – Country wise
2500
1500
1000
500
0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07(upto
Nov'06)
Mauritius USA Japan Netherlands Singapore
Investment Promotion and Facilitation
Promotion
• Holding ‘Destination India’ and ‘Invest India’ events abroad.
Events were held at France, Japan, UK, Finland, Taiwan, Italy,
USA, and Davos this year.
• Publications, Chat room and Website
Facilitation
• Country Focus Desks
• Foreign Investment Implementation Authority
• Policy review comprising of review of route, Equity caps and
procedures.
India
India Japan
Japan Investment
Investment Relations
Relations
• Japan 4th largest investor : US$ 2.18 billion (November2007)
– US$ 168 million in 2005
– US$ 104 million in 2006 (Jan -Sept)
• Top sectors
– Transportation (55%), Electrical Equipment (7%),
• About 350 Japanese companies present in India.
• Japan Global Investments
– US$31 billion in 2004
– US$46 billion in 2005
– Around US$10 billion in East Asia
• Japan cell set up in to facilitate establishment and operation of
Japanese investments.
Japanese
Japanese Companies
Companies in
in India
India
Japanese
Japanese FDI
FDI Projects
Projects over
over 2005-2007
2005-2007
plant
Toyota Motor 128 Increasing its capacity
Corporation
Honda 214 Increasing its capacity and building new
factory