Presented By T.

Sree Hima Bindu 1225110148 MBA - A

The commitment of money or capital to purchase financial instruments or assets in order to gain profitable returns

Investment done by citizens and government of one country (home country) invest in industries of another country (host country).

Foreign Investment through

Foreign Direct Investments

Foreign Institutional Investors

FDI is a cross border investment, where foreign assets are invested into the organizations of the domestic market excluding the investment in stock. It brings private funds from overseas into products or services . In the past FDI was concerned only with highly industrialized countries. US was the worlds largest recipient of FDI during 2006 with an investment of 184 million from OECD countries. France, Greece, Iceland, Poland, Slovak Republic, Switzerland and Turkey also have a positive record in FDI investments.

FDI has become a vital part in the developing countries. Reasons

Availability of cheap labour. Uninterrupted availability of raw material. Less production cost compared with developed countries. Quick and easy market penetration.

other

1991- FDI allowed selectively up to 51% in priority sectors. 1997- FDI allowed up to 100% in sectors like mining, manufacturing. 2000-06- FDI allowed up to 100% in specified sectors. Procedures further simplified. FDI limits increased The top Indian Regions attracting the highest FDI. Mumbai , Delhi and Karnataka. Account for nearly 62% of the total FDI.

Single Brand Retailing : 51% Cash and Carry Model : 100% FDI inflows from August 1991 to April 2010 were $134.6 billion.

Incentives attract FDI. Market size and potential are sufficient inducers. Tax breaks , import duty exemptions, land and power subsidies, and other incentives.

Retailing is one of the worlds largest private industry. Liberalizations in FDI have caused a massive restructuring in retail industry. The benefit of FDI in retail industry superimposes its cost factors. Opening the retail industry to FDI will bring forth benefits in terms of advance employment, organized retail stores, availability of quality products at a better and cheaper price ,and enables a countrys product or service to enter into the global market. Cheaper Production Facilities Availability of new Technology Long term cash liquidity.

Indian government has allowed FDI in retail sector and it allows 51% in multi brand and 100% in single brand Opening of the retail sector to foreign investors was in the interest of the small farmers and industry . FDI helps the consumers because they get many products and with good quality. For retailers allowing FDI will increase competition By allowing FDI is gives opportunity for employment and it gives many jobs in the retail sector and it also reduce inflation .