PROJECT OF

FDI AND FII

SUBMITTED TO SUBMITTED BY
MRS DEEPTI ARSH KOUL
CHRISTINA
TAPAN CHAUHAN
 SHRI PRANAB MUKHARJEE
FINANCE MINISTER OF INDIA
 WHAT IS FDI?
FOREIGN DIRECT INVESTMENT OCCURS WHEN AN
INVESTOR BASED IN ONE COUNTRY ACCUIRES THE
ASSET IN OTHER COUNTRY WITH INTENT TO MANAGE
THE ASSET.
ADVANTAGES
 ECONOMIC GROWTH
 CREATES GOOD TRADE RELATIONS
 INCREASES EMPLOYMENT AND SKILL LEVELS
 TECHNOLOGY DIFFUSION AND KNOWLEDGE
TRANSFER
 INCREASED CAPITAL INVESTMENT
DISADVANTAGES
FDI CROWDS OUT DOMESTIC INVESTMENT
FOREIGN FIRMS HAVE MORE ADVERTISING
POWER
FOREIGN FIRMS ARE ABLE TO DOMINATE THE
FIRMS OF OUR OWN COUNTRY.
TECHNOLOGIES BROUGHT TO OUR
COUNTRIES MIGHT BE INAPPROPRIATE
WHAT GOVERNMENT
SPEAKS ON FDI
INDIA MAY ALLOW FDI IN RETAIL SECTOR IN
FY12-13.
FDI IN THE DEFENCE SPACE IS A TRICKIER ISSUE
AND NEEDS A MORE CAUTIONARY APPROACH.
RIGHT NOW, IT IS VERY IMPORTANT TO PUT IN
PLACE CAPACITY FOR FUTURE TO BRING IN
INVESTMENT AND A NEW AMOUNT OF CAPITAL
GREEN POLICIES AND PROCEDURAL DELAYS
ARE HURTING FDI
FOREIGN INSTITUTIONAL
INVESTOR
 WHAT IS FII?
INVESTMENT MADE BY RESIDENTS OF A
COUNTRY IN FINANCIAL ASSETS AND
PRODUCTION PROCESSES OF ANOTHER
COUNTRY.
ADVANTAGES
ENHANCED FLOWS OF EQUITY CAPITAL
MANAGING UNCERTAINTY AND CONTROLLING
RISKS.
IMPROVING CAPITAL MARKETS.
EQUITY MARKET DEVELOPMENT AIDS
ECONOMIC DEVELOPMENT.
IMPROVED CORPORATE GOVERNANCE.
DISADVANTAGES
PROBLEM OF INFLATION OCCURS IN A COUNTRY
PROBLEMS FOR SMALL INVESTOR
ADVERSE IMPACT ON EXPORTS
WHAT GOVERNMENT SPOKE
GOVERNMENT MAY RAISE THE FII INVESTMENT
LIMITS DEBT FROM 10 BILLION $ TO 30 BILLION $.
CORPORATE BONDS WILL BE RAISED BY 5
BILLION $ THAT MEANS IN BONDS NOW FDI
WILL BE 20 BILLION $
 GDP (IN Rs crore)

6164178
5574449
4947857
4283979
3706473
3239224

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

 CONTRIBUTION IN FDI (in %)
MAURITIUS SINGAPORE U.S.A. U.K.
JAPAN NETHERLANDS CYPRUS OTHERS

22%

44%
4%
4%
4%
5%
8%
9%
THANK YOU