Analytical Study For Foreign Direct Investment In India

Analytical study on Foreign Direct Investment in India

A training report submitted in Partial fulfilment of the requirement of the Degree of

MASTERS OF BUSINESS ADMINISTRATION

(2018-2020)

Submitted to: Submitted By:-

Dr. Liqat Ali Ashish Kumar

Assistant Professor MBA-1 (B)

Roll No. 18421214

Seminar Group 6

SCHOOL OF MANAGEMENT STUDIES

PUNJABI UNIVERSITY PATIALA

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Analytical Study For Foreign Direct Investment In India

ACKNOWLEDGEMENT
The completion of this undertaking cound not have been possible without the
participation and assistance of so many people. Their contribution are sincerely appericatd
and greatfully acknowledgement. However, the group would like to exprees their deep
appreciation and indebtedness particularly to the following.

To all friends and others who in one way or another shared their support either
morally, thoeratically, data providing , thank you.

Above all, to the Great Almighty, the author of knowledge and wisedom, for this
cuteless love.

Thank you

Ashish Kumar

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Analytical Study For Foreign Direct Investment In India

Serial no. Context Page no.

1. Foreign Direct Investment

2. History Foreign Direct Investment

3. Foreign Direct investment In India

4. Route of Foreign Direct

Investment
5. Government Initiatives

6. Literature Review of FDI

7. FDI Policy frame work in India

8. Objectives And Methodlogy
9. Current Status of Fdi In Retail
Sector
10. Service sector Foreign Direct
Investment
11. Construction and Infrastructure
sector FDI in India
12. Telecommunication sector FDI in
India
13. Computer software and
Hardware FDI in India
14. Drugs and Pharmaceutals FDI in
India
15. Automobile Sector in India
16. State-Wise Foreign Direct
Investment in India
17. Karnataka , Maharashtra, Delhi

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Analytical Study For Foreign Direct Investment In India

Foreign Direct Investment

18. Gujraat, Punjab and Haryana
Foreign Direct Investment
19. DIPP’s Financial year-wise FDI
equity inflows
20. FDI equity inflows (month-wise)
During calender year 2017-18
21. Sectors Attracting Highest FDI
equity inflows
22. Share of top countries FDI equity
inflows
23. Statement on RBI’s regional
offices state covered data
24. Statement in country wise data
FDI during Apr 2000 to Mar 2018
25. Top sector in FDI in India
26. Problem for Low, Increasing
Determinants &Need FDI in India
27. Type of implementation & Role
of FDI in India
28. List of American and Russian
companies Employment in India

FOREIGN DIRECT INVESTMENT

INTRODUCTION

It is the combination of the three words Foreign Direct Investment. Foreign Direct
Investment is the investment one nation of the company can be investment in the other
nation of the world. Foreign Direct Investment majorly the role of the development the
developing the economy growth and development of the nation of the world. Foreign Direct
investment plays a very special role in the development of the nation. Sometimes the
National and Domestic available capital is not more adequate for the purpose of overall
development Growth and Economy of the Nation of the country. Foreign Capital can be the
way of filling in gaps between the Domestics saving and Investment. India can attract the
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Analytical Study For Foreign Direct Investment In India

world to can much larger Foreign Investments than it has done in the past. In the present
study has focused on the trend of Foreign Direct investment flow in India during 2000-01 to
2017-18 (up to June, 2018).

According to the International Monetary Fund, foreign direct Investment, commonly known
as FDI.

HISTORY OF FOREIGN DIRECT INVESTMENT

In 1914, the world can be realised that the Foreign Direct Investment can be Development
Growth and Economy of the world. In 1914 most of the World’s more surplus savings flowed
from Western Europe to the development nation of the time, in America railroads and
canals were financed, by the European Capital. The United Kingdom was the largest
shareholder in the global stocks of foreign investments in 1914.

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Analytical Study For Foreign Direct Investment In India

In this time UK has surplus the capital of the world. After 1945, world global Foreign Direct
Investments flows did recovered from depression and war, but the geographical pattern of
FDI was properly transformed.

After the end of the Second World War the United States of America was the Leaders of the
Foreign Direct investment in the world businesses from other nations have taken up the flag
of FDI, including many who were not in a financial position to do so just a few years ago.

In 2001, the world’s Foreign Direct Investment was invested the 90% portions of FDI of the
rich country of the world. FDI growth has been a key factor in the “International” nature of
business that many are similar in the 21st century.

FOREIGN DIRECT INVESTMENT IN INDIA

Foreign Direct Investment was first of all introduced in 1991 under Foreign Exchange
Management act (FEMA), driven by Finance Minister Manmohan Singh. The major
source of economic development in India is Foreign Direct investments. As

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Analytical Study For Foreign Direct Investment In India

Manmohan Singh subsequently become the Prime Minister, this has been one of his
top problems, even in the 2012 election,

Starting from a baseline of less than $1 Billon in 1990, a recent UNCTAD+ survey
projected India AS the second most important Foreign direct Investment (behind
China) for transnational corporations during 2009-2012. Acc. To the data, these
sectors has attracted higher FDI were Services, Construction activity and computer
and hardware and software and Telecommunication. India leading sources of Foreign
Direct Investment are Singapore, United States of America, Mauritius, United
Kingdom, Japan. UNCTAD data Foreign Direct Investment flows were $10.5 Billion, a
drop of 45% from the first half of the last year.

According to the Financial times published in 2015 India become the major economy
that took over the United States Of America and china Was Top of the nations or
country of the Foreign Direct Investment around the world. And in the first half of the
2015 $27 billion was attracted by The United States Of America china attracted $28
billion. India attracted about $31 billion that was far better than others.

In 2016-17 Foreign Direct Investment inflows all time best with US$ 60.1 billion, The
commerce and ministry said on Friday, as the Narendra Modi eased rules to lure
global conglomerates to set up industry in sectors such as defence and Indian
railways.

Foreign direct Investment at US$ 55.25 billion in the year finished March 2016, it is
the record, in 2016-17 the FDI inflows were even higher at US$ 60.10 billion.

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Analytical Study For Foreign Direct Investment In India

Foreign Direct Investment in India increased by 1168 USD million in June of 2018.
Foreign Direct investment in India averaged 1315 USD million from 1995 to 2018, in
the history of India the Foreign Direct Investment was reached all time high 8579 USD
million in August of 2017 And a record low of all time-1336 USD million in November
of 2017.

Countries Sending Foreign direct Investment India are:

 United kingdom
 Singapore
 Mauritius
 France
 United States Of America
 Netherlands
 Malaysia
 Japan
 Germany

Sectors Of India Attracting Foreign Direct Investment From Foreign Countries

Are:
 Chemicals
 Fuels

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Analytical Study For Foreign Direct Investment In India

 Telecommunications that involves services of radio paging, cellular mobile And Basic
Telephones
 Metallurical Industries
 Services Sector That Includes Financial And Non-Financial
 Food Processing Industries
 Pharamaceuticals And Drugs
 Electricals Equipment That Includes Electronics And Computer Software

Routes Of Foreign Direct Investment

These are generally two routes of Foreign Direct Investment Indian company may receive
India Gets FDI’s-

1. Government route
2. Automatic route

Government route

According to this route there is prior approval of the government this route. The application
needs to be made foreign Investment facilitation portal, which fill facilitate single window
clearance of Foreign Direct investment application under the approval route. FDI in activity
not covered under the automatic route requires prior which are considered by the Foreign
Investment Promotion Board (FIPB), Department of economic affairs and Ministry Of
Finance. This route was the responsible agency to oversee the route was abolished on 24
May 2017. The FIPB Offers the single window clearance for the investment proposals (worth
Rs. 2,000Cr. Or Less) which are not permitted through the automatic route. The CCEA
generally considered proposals amounting to INR 2000Cr. Or more. According to the latest
FDI Policy of the India, FDI in many major and significant sectors are possible beyond 49%
through this government route.

Automatic Route

Foreign Direct Investment in sectors Activity to the extent permitted under the automatic
route does not require any approval of the Government of the India or Reserve Bank Of

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Analytical Study For Foreign Direct Investment In India

India. These two routes of the Foreign Direct Investment in India, One Is the Automatic
route, as it does not much processing and documentations. In this there is no approval of
the government of the India or Reserve Bank Of India. The investors are formed a wide
range of sectors to only notify the relevant regional officer of RBI regarding the inward
remittances and insurance of share within the period of 30 days occurrences of the
activity.in the Foreign direct Investment policy of India, there are many large number of
economic sectors are open to the FDI through the automatic route up to 49% and up to 74%
or 100% in many sectors

Government Initiatives

To increases the inflow of Foreign Direct Investment Indian Governments has applied
Foreign Direct Investment policies.in January 2018, Government of the India allowed Foreign
Airlines to investment in Indian Airline in Air India up to 49% with Government approval. The
limit of the Indian Airline in Air India cannot exceed the 49% of the investment which are
directly or indirectly of the Foreign Direct Investment.

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Analytical Study For Foreign Direct Investment In India

The government of India has increased the Foreign direct Investment the upper limit from
29% to 49% in the insurance sector in 2014.They also launched the MAKE IN INDIA policy in
September 2014 under which FDI policy for 25sectors were changed further as 2015 April
foreign direct investment inflows in India has grown 48% after the launch of the policy of
MAKE IN INDIA.

In May,2018 Walmart company acquires a 77% shares in Flipkart for a consideration of US

$16Billon.

India ranking in world Foreign Direct investment 2013 is 15 th in the World to the FDI it is
increased the ranking in 2014 India FDI ranking become the 9 th in the world. Now India
policy to become the destination for Foreign direct investment Attained the increased then
ranking of the FDI india.

Literature review of Foreign Direct Investment

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Analytical Study For Foreign Direct Investment In India

Dar, Presley And Malik (2004) studied the causality and long term relationship between
Foreign Direct Investment (FDI), Other Socio-Political Determinants and economic. In this the
literature gives the direct relationship between the Foreign Direct Investment and Economic
growth of the country. These paper gives the economic growth, level of the interest rates,
exchange currency rates, unemployment and political stability as determinants of the level
of the level of Foreign Direct Investment inflows for Pakistan over the period 1970-2012.
Almost all variables are found to have the written signs with the two way normally
relationship. The today study also give the estimate an error correction data by ordinary
least scares based on VAR (2).

Dr. S N Babar and Dr. B V Khandare , (2012), ”Structure of Foreign Direct Investment in India
during the world globalisation in this period ,The study is mainly concentrate on change the
structure and new direction of India’s Foreign Direct Investment during the World
Globalisation period. These studies gives the Information regarding the benefits of the
Foreign Direct Investment for economic development and growth of the nation .The study as
been done through the oral analysis of Foreign Direct Investment participation as well as
study of nation wise flow of Foreign Investment in India till 2010.

Foreign Direct Investment policy frame work in India

India’s Foreign Direct Investment policy has been estabhlished with a view to inviting and
encouraging Foreign Direct Investment in the India. The process of regulation and approval
has been systematically liberalised. FDI policy is the one keys factor diving investments flows
to a country. There has been sea change’s in India’s approach in the Foreign Investment from
the before 1990s when it strated structural economic reforms about almost every sector of
the economy of the nation of the world.

 Pre-liberalisation period
 Post-Liberalisation period

Pre-Liberalisation period

India in the strating days to followed an extremely take care and selective approach while
select Foreign Direct Investment Policy in the view of the Governance of impact strategy of

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Analytical Study For Foreign Direct Investment In India

the industry. The regulatory framework was consolidated through the Foreign Exchange
regulation act (FERA). In 1973 days the Foreign company can only the joint venture like the
partners or equity holding foreign only up to 40 per cent of the company. In the similar ways
various exemption are given to the foreign company in the field of the exporting oriented
businesses and high technology and higher priority area which the company can per cent
equity holding of the company.

Pre-liberalisation period

A major shift India suffering from the economic condition of the nation in the world when
India embarked upon the economic liberalisation and refroms programs in 1991 aiming to
raise the capital or economic growth and development of the natioRn. Industrial policy can
be changed the slow but surely removed the strictness rules and regulations of the Foreign
Direct Investment projects and businesses expansions on the one hand and the India has
allowed to the Foreign Investment technology and the capital fund on the other.

 Introduce the two route of approval of the FDI-RBI’s the route are Government route
and automatic route.
 Permissions to the NRI and overseas Corporate Bodies (OCBs) to investment up to
100% in high priority sector.
 Automatic route the restrictions of the industry was slowly removal of restrictions of
the FDI in low technology area liberalisation of technology imports.
Objectives and Methodology
Research Objectives
 To discuss the Foreign Direct Investment policy regulatory in India.
 To understand the demand for FDI in India.
 To identify to show the determinants of Foreign direct Investment In the nation.
 To performed the sector wide FDI funding in India.
 To read the trends or results of FDI flow in India during the period 2000-01 to 2017-
18 (June 2018).
 To analysis the nation wise to funding the nation approval the Foreign Direct
Investment inflows capital in India.

Research Methodology

Type of research; - quantity & statistical research.

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Analytical Study For Foreign Direct Investment In India

Data collection method:- Primary data or secondary data from the different website &
different books of the FDI and data or reports of the RBI.CEDAR-USIBC reports on Foreign
Direct Investment, Reports of ADB ( Asian Development Bank).

Data:-Data of manufacturing, real estate, service and Construction, mining sector etc. From
year June 2000 to June 2018 is consider for the study.

Source of Data Collection:- The study of data is based on the published reports of the
various sources of the data collection. these data was collection from the following sources.

 The report of RBI on the Indian economy of the RBI

 Report based survey, Government of India
 Central statistical organisation
 Secretariat of Indian industrial assistance (SIA)
 Department of Industrial policy and promotion

Sector wise Foreign Direct Investment

inflows of FDI (Rs. In Crores)

39225.17 28030.37 191752.15

44667.08
47538.99

49678.09

61340.03 111127.49

61707.07

80608.47

Servi ces constructions Tel ecommuni cations

Computer Software And Ha rdwa re Drugs & Pha rma ceutica l s a utomobi l e Industry
Chemi ca l s power Metal l urgi cal Industry
Hotel And Touri s m

Current status of Foreign Direct Investment in India Retail Sector:-

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Analytical Study For Foreign Direct Investment In India

As of June 2018, The Central Government of India allowed Foreign Direct Investment in
single and Multi brand retailing along with the following conditions:-

Up to 100% Foreign Direct Investment in single brand retail.

 30% national or Demostic capital requirement eased to prefer the capital is rather
than compoulsary.
 In which only one NR entity owner or the brand otherwise
 Products can be sold should be sale of a “single brand” the product can be sold down
the same brand international market.
 “Single brand” product can be covered only the product which the product can be
manufactured.

Foreign Direct Investment in multi brand retail trading

 Minimum 100million USD dollar can be invest in the Indian company.

 Minimum the 50% of the total Foreign Direct Investment can be re investment in the
India infrastructure of the company within in the 3 years.
 New agriculture product can be sold to be permitted the UN brand.
 The FDI retail can be set in the city which have at least 1 million population in the
city.

Service sector inflows of the Foreign Direct Investment

Foreign Direct investment can be play the very important role to development the nation of
the world. FDI can be play the very major to development or growth the Indian service
sector. India’s services sector involve the very large range of activity like trade, transport ,
storage and communication , hotel and restaurants , community , financing , insurance , real
estate , social and personal services , business services and service associated with
communication.

The service sector is the main element to the development the economic growth of the
India. This sector can be estimate to contribute round 54% of India gross value added in
2018 and it contributes the 28.6% of the employment of the total population. Net service
export from India grown 14.98% in this year and year on year US$ 77562 million in 2017-18.
Nikkei India services purchasing manager index stood at 49% in May, 2018.

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Analytical Study For Foreign Direct Investment In India

In the computer software and hardware allows the permission of the 100% of the Foreign
Direct Investment in the automatic route.

The Telecom sector as limit to increase the 49% to 74%. Foreign Direct Investment is allow
49% in the automatic route but the Foreign Direct Investment in the License Company Indian
Promoters holding companies shall require approval of FIPB.

Construction and Infrastructure Foreign Direct investment in India

Construction or Infrastructure is the backbone or economic growth of the India. This sector
is the main or highly responsible for the development or the focuses on the government for
initiating the top class or world class infrastructure or constructer in the India. Constructor
or Infrastructure sectors like the bridge includes power, dams, roads, urban infrastructure
development. In 2016 India jumped 19 ranks in the World Bank performance index 2016.
Now India rank in the 35th the total of 160 countries.

Foreign Direct Investment was investing amount received in construction and infrastructure
development sector housing , built up construction and infrastructure 2000 to 2018
understood at US$ 26Billon in the department of industrial policy and promotions. This
sector in India is assumed to a expect increase at a compound annual growth rate of 10.5%
from US Dollar 160billon in 2017 to US Dollar 215billon by 2020.

India as allowed 100% foreign direct investment in the construction and infrastructure in the
real estate development or economic growth with the strict conditions rule and regulations.

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Analytical Study For Foreign Direct Investment In India

Telecommunication Sector inflows of Foreign Direct Investment in India

During the last 25 years Indian telecom sector was growing very fast with the changes of the
advent of private investment and the Foreign Direct Investment. In the started days there
was only government monopoly then the telecom connection was a status symbol of the
society and need of other connection was a next to impossible ordeal. In the started the
STD-PCO booth was the main source of the telecom sector in now days the STD-PCO was
closed.

The Indian telecom sector was allowed the 100% Foreign Direct Investment which was
retained the 49% is allowed in the automatic route.

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Analytical Study For Foreign Direct Investment In India

Computer Hardware and Software sector inflows of Foreign Direct Investment In

India

Foreign Direct Investment inflows to Computer Hardware and Software sector in the first
half of the few previous year ago 2007-08 has been only the USD 0.3 billion in the few year
ago the computer hardware and software sector was grown very fast. The computer
software and hardware industry has recorded the growth of 28% CAGR in the last five year.
Computer hardware and software was increased the Indian economy.

The Foreign direct investment is allowed in the computer hardware and software is allowed
to permitted in the automatic route of the India Foreign Direct Investment. In the condition
of the computer software and hardware sector has 26% of the equity will be spent on the
welfare activites for the Indian population in five year.

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Analytical Study For Foreign Direct Investment In India

Drugs And Pharmaceuticals inflows in Foreign Direct Investment in India

Foreign Direct Investment inflows of Drugs and Pharmaceuticals sector in India has been
developing very fast in the last few year of the several incentives that have been provided by
the Indian government. In the estimate of 2004 the drugs and Pharmaceuticals sector of
India was worth USD 8.8 billion which has been contribute the 1.3 per cent in India GDP. In
the Indian market in the drugs and pharmaceutical Industry in India is net worth more than
US Dollar 4.8 billion. The top international companies having In the presence of Drugs and
Pharmaceuticals in India are Johnson & Johnson, Glaxo Smithkline, Pfizer, Novartis.

In this sector the Government of the India has allowed the 100 per cent Foreign Direct
Investment which has helped to grow the Indian economy.

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Analytical Study For Foreign Direct Investment In India

Automobile Industry inflows in Foreign Direct Investment in India

Foreign Direct Investment inflows to Automobile industry is the one of the most growing or
developing sector in the Indian market. Automobile sector can be strong the India economic
growth in the Foreign Direct Investment. The automobile sector in India is the world’s top
fourth biggest, with the country presently being the world's 4th largest manufacturer of cars
and 7th largest manufacturer of commercial vehicles in 2017. Indian automotive industry
(including component manufacturing) is expected to reach Rs. 16.16-18.18 trillion (US$
251.4-282.8 billion) by 2026. Two-wheelers dominate the industry and made up 81 per cent
share in the Indian automobile sales in FY18. Overall, Indian automobiles sales increased at
7.05 % CAGR between FY13-18 with 25.97 million vehicles getting sold in FY18. Indian
automobile industry has received Foreign Direct Investments (FDI) worth US$ 18.76 billion
between April 2000 and March 2018.

Foreign Direct Investment up to 100% has been permitted under automatic route to this
industry, which has the turnover of USD 12 billion in the auto parts industry.

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Analytical Study For Foreign Direct Investment In India

The automobile sector in India does not belonging to the licensed agreement.

Imports of the automobile components is allowed there is no restrictions and also

encouragred.

The manufacturing of Automobile sector are permitted 100% Foreign Direct Investment
under the automatic route.

State wise Foreign Direct Investment in India

Foreign Direct Investment in Karnataka

In this time when India is suffering a fall Foreign Direct Investment (FDI) inflow downward
growth. In this time the state Karnataka has standing out in this situation. The state
Karnataka has record the highest growth in the Foreign Direct investment. In the financial
2016-17 Karnataka Foreign Direct investment is US Dollar 2.1 billion and it became increase
at 8.6 US Dollar in the financial 2017-18 in that time they registering the highest growth rate.
Which is 300 per cent the growth of the financial year. This data as analysis by care Ratings
showed.

The growth is that time when the Indian Foreign Direct Investment is recorded a five year
low Foreign Direct Investment inflow the growth rate by 3 per cent at US$ 45.25 billion in
the financial year 2017-18 after a increasing growth in the financial year 29% growth
increase in the session 2015-16 and it increases 27 percent in 2014-15.

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Analytical Study For Foreign Direct Investment In India

Foreign Direct Investment in Maharashtra

Maharashtra is the no.1 state in the Foreign Direct Investment in India. Maharashtra is the
richest state in the India. The state Maharashtra received the 50 proposals from the different
15 countries in the world in Foreign Direct Investment. This an expressing the desire ness to
partner in Mega-Infrastructure projects. The Maharashtra govt. can be show the aggressive
nature to the Foreign Direct Investment in the result of this nature can be proved that
Maharashtra can be Leading top in the Foreign Direct Investment.

The Chief Minister of Maharashtra Devendra Fadnavis is leading the top level clients or Deli-
gation from the Singapore and South Korea Septemper 25 to 29 new eyeing investments
through the overseas partnership for the big projects can be completed in the year 2019.
The main agenda to topping the investment for the ambitious for Mumbai- Nagpur super
communication network mostly like to cross the Rs. 46000 Cr. The Cm Devendra Fadnavis
has schedueled metting with Samsung, Hyundai, Seoul Hosang Chemicals, LG Electronics,
Heavy Engernering, among others. This project is short listed through Foreign Direct
Investment involing the Pune and Nagpur Airports through the Partnership with Singapore’s
Changi Airport. In India the Maharashtra only contributes the total Foreign Direct Investment
share of Rs. 1.20 lakh crore. This invest can be show the larger co nfidence in investors in
Maharashta.

The top nation which can be invest in Maharashtra:-

Singapore

South Korea

Mauritius

United Kingdom

United States of America

Netherlands

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Analytical Study For Foreign Direct Investment In India

Foreign Direct Investment in Delhi

In the starting day of the Foreign Direct Investment in Delhi is top in the India. Foreign Direct
Investment plays a very important role to developing and economically strong sector to the
Delhi. In now days Delhi is 2nd top state in the Foreign Direct Investment in India. In 2015-16
Delhi state can covered the 44 per cent share in the Indian market but in the session 2016-
17 Delhi share can be reduce at the 26 per cent of the Foreign Direct Investment. Delhi is the
strong Foreign Direct Investment in India. Many top class Foreign Company can be
investment in the Delhi. These sector are the main source of the Foreign Direct Investment
are those Telecommunication, Constructions, information technology, Services etc.

Delhi was able to attract a high Foreign Direct Investment inflow in the realty sector, as the
Cenetral Government in India has allowed 100 per cent Foreign Direct Investment.
Pertaining to integrated townships on the condition based the construction area of the
township will be equal to the 100 acre of the Delhi.

Impact of Foreign Direct Investment on Delhi economy – development in important sector

 Real estate
 Hotel and Tourism
 Information Technology
 Transport and logistics
 Financial services
 Retail and leisure
 Health care and medical Tourism

Foreign Direct Investment in Gujraat

Foreign Direct Investment in Gujraat is the main state of the India. Foreign Direct investment
plays an very important role to development in the growth of the Gujraat, The Foreign Direct
Investment is the important reason behind the economically strong state in the India.

In the official data , Gujraat attracted Foreign Direct Investment the net worth is US Dollar
3.36 billion which is near about the Rs. 22610 crore in financial year 2016-17. It was the 50
per cent higher than the 2015-16 ( US Dollar 2.24 billion ) and almost four times higher than
2013-14 when Foreign Direct Investment totally was only US Dollar 860 million.

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Analytical Study For Foreign Direct Investment In India

In Gujraat Foreign Direct Investment is the automobile sector, in this sector which have
received the largest share of the Foreign Direct Investment , These automobile project was
only itself earning the efforts of the state to provide the auto mobile hub in the state.

The Suzuki has invest the amount near about the Rs. 3000 crore in its car manufacture plant
in the Malesena, Another company Taiwan’s Maxxis has invest the amount Rs. 2600 crore for
the tyre manufacture plant.

The Honda motorcycle and scooter India which has invest Rs. 1100 crore for its scooter only
plant at Vithlapur in the Foreign Direct Investment.

According to the official data, Japan is the largest portion to Foreign Direct Investment in
Gujraat in the many previous year. The Japanse investment in Gujraat is near at US Dollar 1
billion so far, and it is expected that it becomes the triple to US Dollar 3 billion by 2020.

These companies are the main investor Foreign Direct Investment in the Gujraat are Toyoda
Gosei Minda, Kansai Nerolac, Otsuka Pharma, Sazuki, Taiwan’s Maxxis are the main
investor’s in Gujraat.

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Analytical Study For Foreign Direct Investment In India

Foreign Direct Investment in Haryana and Punjab

Foreign Direct Investment is the main source of the development of the Punjab and
Haryana. Foreign Direct Investment is the backbone and economically growth and
development of the Haryana and Punjab.

In Punjab the Foreign Direct Investment is near about the amount US Dollar 20 billion in the
Punjab. The service sector is the largest investment sector in the Punjab which is covered
the 46 per cent of the Foreign Direct Investment. The electric of Punjab has 30.7 per cent FDI
share and Construction sector have near about 15 per cent. The manufacturing and
irrigation sector around the 9.8 per cent of the total Foreign Direct Investment.

In Haryana according to the Reverse Bank of India Foreign Direct Investment inflows the
amount is near about US Dollar 23.7 billion in the 2000. In now days it become the invest is
near about 200 billion US Dollar. Construction has the largest sector in Haryana Foreign
Direct Investment which have covered the 60.9 per cent of the FDI. Service are covered the
21.3 per cent and electricity sector is 14.2 per cent.

These are the main industry of the Punjab in Foreign Direct Investment are:-

 Nestle
 Milkfed
 Cremica foods
 Textile industry
 Nahar group
 Vardhman group
 Superme Tex Mart Ltd
 Hero cycles

These are the main industries of the Haryana in Foreign Direct Investment are:-

 Agro based industries

 Textile industry
 Yakult’s Danone India Pvt. Ltd.
 Orient Craft Ltd.
 Honda motorcycle and scooter India
 Escorts
 Omax Auto
 Unitect Group

DIPP’s- Financial Year-Wise FDI Equity inflows

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Analytical Study For Foreign Direct Investment In India

S. No. Financial year Amount of FDI Inflow

(April-March)
Financial years 2000-01 to 2015-16 ( Up To June In Million USD
2018)
1. 2000-01 2378.68
2. 2001-02 4027.69
3. 2002-03 2704.34
4. 2003-04 2187.85
5. 2004-05 3219
6. 2005-06 12491.77
7. 2006-07 24573.43
8. 2007-08 31395.97
9. 2008-09 25834.41
10. 2009-10 21383.05
11. 2010-11 35120.8
12. 2011-12 22423.58
13. 2012-13 24299.33
14. 2013-14 30930.5
15. 2014-15 40000.98
16. 2015-16 43478.27
17. 2016-17 43478
18. 2017-18 44857
19. 2018-19 ( April-June 2018) 14585
Cumulative total ( from April, 2000 to June 2018) 429369.65

FDI Equity Inflows (Month-Wise) during Calender Year 2017-18

Financial year 2017-18 (April-March) Amount of FDI Equity Inflow

In Crore In Million US
Dollar
1. April,2017 20,826 3,229
2. May,2017 26,159 4,060
3. June,2017 20,101 3,119
4. July,2017 31,112 4,827
5. August,2017 51,198 8,004
6. Septemper,2017 13,632 2,115
7. October,2017 17,454 2,682
8. November,2017 20,019 3,086
9. December,2017 30,956 4,819
10. Janubary,2017 15,386 2,418
11. Febuary,2017 20,478 3,181
12. March,2017 21,569 3,317

26
Analytical Study For Foreign Direct Investment In India

2017-18 Financial Year (2017-18) 288,889 44,857

2016-17 Financial Year (2016-17) 291,696 43,478
% Age Growth Over Last Year (-) (+) 3 %

Sector Attracting Highest FDI Equity Inflows

Chart Title
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2015-16 2016-17
2017-18 Commul ative Inflows Apri l 2000, Ma rch 2018

Share of Top Investing Countries FDI Equity Inflows (Financial Year)

Ranks Country 2015- 2016- 2017- Commu- % Age

16 17 18 Lative Of Total
In In In Inflows Inflows
Million Million Million April,00-
US $ US $ US $ march,2018
1. Mauritius 8,355 15,728 15,941 127,578 34%
2. Singapore 13,692 8,711 12,180 66,771 18%
3. Japan 2,614 4,709 1,610 27,286 7%
4. U. k. 898 1,483 847 25,438 7%
5. Netherlands 2,643 3,367 2,800 23,482 6%
6. U.S.A 4,192 2,379 2,095 22,417 6%
7. Germany 986 1,069 1,146 10,845 3%
8. Cyprus 508 604 417 9,573 3%

27
Analytical Study For Foreign Direct Investment In India

9. France 598 614 511 6,237 2%

10. UAE 985 675 1,050 5,754 2%
Total FDI Inflows From All 40,001 43,478 44,857 -
Countries

Statement on RBI’s Regional Offices (With State Covered) Received FDI Equity
Inflow’s (From 2000 to March, 2018

Amount in US$ in Million

s. RBI’s Regional State Covered 2016- 2017- Commu %

N Office 17 18 lative age
o. inflow inflo
2000 to w (in
March US$)
18
1. MUMBAI MAHARASHTR, DADRA $ 19,654 13,423 115,70 31
NAGAR HAVELI, DAMAN $ 6
DIU
2. NEW DELHI DELHI, PART OF UP AND 5,884 7,656 75,693 20
HARYANA
3. BANGALORE KARNATAKA 2,132 8,575 30,949 8
4. CHENNAI TAMILNADU, PONDICHERRY 2,218 3,475 27,235 7
5. AHMEDABAD GUJRAAT 3,367 2,091 18,743 5
6. HYDRABAD ANDHRA PARDESH 2,195 1,246 15,012 4
7. KOLKATA WEST BANGAL, SIKKIM, 50 218 4,203 1
ANDAMAN & NIKOBAR
ISLANDS
8. KOCHI KARELA, LAKSHDEEP 454 208 1,963 1
9. JAIPUR RAJSATHAN 165 117 1,597 0.4
10 CHANDIGARH CHANDIGRARH, PUMJAB, 6 108 1,472 0.4
. HARYANA , HIMACHAL
PARDESH
11 BHOPAL MADHYA PARDESH, 76 28 1,400 0.4
. CHATTISGARH
12 PANAJI GOA 83 43 967 0.3
.

28
Analytical Study For Foreign Direct Investment In India

13 KANPUR UTTAR PARDESH 8 90 660 0.2

.
14 BHUBANESH ORISSA 12 65 481 0.1
. WAR
15 PATNA BIHAR, JHARKHAND 10 10 113 0.03
.
16 GUWAHTI ASSAM, ARUNACHAL 2 13 544 0.03
. PARDESH, MANIPUR,
MEGHALAYA,NAGALAND,TRI
PURA
17 JAMMU JAMMU & KASHMIR 0.2 0 6 0
.

Statement in Country- Wise FDI Equity Inflows From April 2000 To March 2018

S. Name of the Country Amount of Foreign % age with inflows

No. Direct Investment
inflows (US$ million

1. Mauritius 127,578.35 33.85

2. Singapore 66,670.70 17.72
3. Japan 22,285.78 7.24
4. U. K 25,438.20 6.75
5. Netherlands 23,482.06 6.23
6. U.S.A 22,417.45 5.95
7. Germany 10,844.56 2.88
8. Cyprus 95,72.90 2.54
9. France 6,236.74 1.65
10. UAE 5,754.41 1.53
11. Switzerland 4,313.86 1.14
12. Hong Kong 3,114.14 0.83
13. Cayman Islands 2,825.67 0.75
14. Spain 2,715.24 0.72
15. South Korea 2,708.43 0.72
16. Italy 2,609.75 0.69
17. Luxembourg 2,506.83 0.67
18. China 1,985.93 0.53
19. Sweden 1,430.53 0.358
20. British Virginia 1,391.19 0.37
21. Belgium 1,295.05 0.34

29
Analytical Study For Foreign Direct Investment In India

22. Russia 1,235.78 0.33

23. Canada 1216.78 0.32
24. Australia 902.88 0.24
25. Malaysia 866.76 0.23
26. Poland 669.75 0.18
27. Indonesia 629.1 0.17
28. The Bermudas 502.07 0.13
29. Ireland 489.24 0.13
30. Denmark 482.34 0.13
31. Oman 469.2 0.12
32. South Africa 435.13 0.12
33. Finland 421.44 0.11
34. Thailand 380.87 0.10
35. Austria 371.87 0.10
36. Bermuda 354.36 0.09
37. Taiwan 290.75 0.08
38. Philippines 235.93 0.06
39. Norway 217.54 0.06
40. Seycheles 202.13 0.05
41. Saudi Arabia 201.21 0.05
42. Beharin 164.60 0.04
43. Virgin Islands 151.53 0.04
44. Chile 150.54 0.04
45. Israel 143.31 0.04
46. Turkey 140.19 0.04
47. Morocco 138.00 0.04
48. Mexico 121.93 0.03
49. British Iskes 100.91 0.03
50. Sri Lanka 84.15 0.02
51. Portugal 82.67 0.02
52. West Indies 79.17 0.02
53. Kuwait 63.44 0.02
54. NewZeland 63.41 0.02
55. St. Vincent 55.82 0.01
56. Channel Islands 47.43 0.01
57. Panama 45.02 0.01
58. Korea(North) 40.81 0.01
59. Bahamas 40.62 0.01
60. Saint Kits & Nevis 33.53 0.01
61. Jordan 30.54 0.01
62. Isle of Man 30.07 0.01
63. Liechtenstein 26.47 0.01
64. Kazakhstan 26.35 0.01
65. Czech Republic 24.99 0.01
66. Brazil 24.83 0.01
67. Samoa Islands 23.99 0.01

30
Analytical Study For Foreign Direct Investment In India

68. Qatar 23.89 0.01

68. Kenya 22.74 0.01
70. Iceland 22.50 0.01
71. Gibraltar 20.88 0.01
72. Hungary 18.77 0.00
73. Malta 15.58 0.00
74. Liberia 14.70 0.00
75. Solvakia 13.97 0.00
76. Belorussia 13.78 0.00
77. Nigeria 13.61 0.00
78. Belarus 13.17 0.00
79. Scotland 12.87 0.00
80. Guersney 12.05 0.00
81. Cambodia 10.34 0.00
82. Argentina 10.23 0.00
83. Maldives 9.16 0.00
84. Myanmar 8.97 0.00
85. Greece 8.92 0.00
86. Slovenia 8.73 0.00
87. Egypt 7.89 0.00
88. Romania 7.73 0.00
89. Ghana 7.69 0.00
90. Belize 7.16 0.00
91. Uganda 7.13 0.00
92. Ukraine 7.07 0.00
93. East Africa 5.61 0.00
94. Uruguay 5.33 0.00
95. Colombia 5.12 0.00
96. Rep. of Fiji Islands 5.07 0.00
97. Tunisia 4.96 0.00
98. Vietnam 4.92 0.00
99. Tanzania 3.45 0.00
100 Vanuatu 3.20 0.00
.
101 West Africa 3.03 0.00
.
102 Lebanon 2.78 0.00
.
103 Trinidad & Tobago 2.64 0.00
.
104 Bulgaria 2.59 0.00
.
105 Monaco 2.51 0.00

31
Analytical Study For Foreign Direct Investment In India

.
106 Nepal 2.45 0.00
.
107 Estonia 2.43 0.00
.
108 Botswana 2.29 0.00
.
109 Yemen 1.95 0.00
.
110 Afghanistan 1.871.52 0.00
.
111 San Marino 1.37 0.00
.
112 Tajikistan 1.04 0.00
.
113 Cuba 1.00 0.00
.
114 Iran 1.00 0.00
.
115 Guyana 0.92 0.00
.
116 Togolese Republic 0.86 0.00
.
117 Saint Lousia 0.78 0.00
.
118 Mozambique 0.67 0.00
.
119 Marshall Islands 0.54 0.00
.
120 Congo(DR) 0.52 0.00
.
121 Croatia 0.51 0.00
.
122 Jamaica 0.43 0.00
.
123 Latvia 0.43 0.00
.

32
Analytical Study For Foreign Direct Investment In India

124 Aruba 0.40 0.00

.
125 Brunei Darussalam 0.36 0.00
.
126 Lithuania 0.29 0.00
.
127 Anguilla 0.24 0.00
.
128 Iraq 0.24 0.00
.
129 Yugoslavia 0.00 0.00
.
130 Zambia 0.21 0.00
.
131 Suriname 0.19 0.00
.
132 Peru 0.18 0.00
.
133 Georgia 0.10 0.00
.
134 St. Lucia 0.07 0.00
.
135 Libya 0.06 0.00
.
136 Mongolia 0.05 0.00
.
137 Bangladesh 0.05 0.00
.
138 Sudan 0.05 0.00
.
139 Costa Rica 0.05 0.00
.
140 Ivory Coast 0.05 0.00
.
141 Fiji Island 0.04 0.00
.
142 Serbia 0.02 0.00

33
Analytical Study For Foreign Direct Investment In India

.
143 Cape Verde 0.01 0.00
.
144 Muscat 0.01 0.00
.
145 Venezuela 0.01 0.00
.
146 Algeria 0.00 0.00
.
147 Cameroon 0.00 0.00
.
148 Turkmenistan 0.00 0.00
.
149 Bolivia 0.00 0.00
150 Barbados 0.00 0.00
.
151 Kyrgyzstan 0.00 0.00
.
152 Syria 0.00 0.00
.
153 Djibouti 0.00 0.00
.
154 Paraguay 0.00 0.00
.
155 Senegal 0.00 0.00
.
156 Swaziland 0.00 0.00
.
157 Fii’s 0.06 0.00
.
158 NRI 4,684.25 1.24
.
159 Country Detail Awaited 6,980.16 1.85
.
160 RBI’s-NRI’s Schemes(2000-2002) 121.33 -
.

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Analytical Study For Foreign Direct Investment In India

Top Sector in Foreign Direct Investment in India

Sector Wise
El ectri ca l equi pment
Information & Boardca sting
food Proces s i ng Industri es
Metal l urgi cal Industry
Hotel And Touri sm
Construction Infra structure
Power
Chemi cal s (Other Than Fertil i zers )
Drugs And Pha rma ceutica l s
Tradi ng
Automobi l e Industry
Construction Devl opment
Tel ecommuni cation
Servi ce s ector
0 10000 20000 30000 40000 50000 60000 70000
Col umn2

Problems For Low FDI In India

Corruption:- In India corruption is every in the every public sector of the Country. Corruption
are the main reason of the low Foreign Direct Investment in India. The corruption can be
decrease the decision making power of the investors in Foreign Direct Investment.

High Corporates Tax law:- In the India there are very high rate of the taxes are on the Foreign
Direct investment policy. In the Asia Reason the tax rate are 15 to 30 per cent but in India
the tax rate are near about 48 percent companies in India.

Stringent labour Laws:- Large firms in India are not allowed to retrench or layoff any workers,
or close down the unit without the permission of the state government. These laws protect
the workers and thwart legitimate attempts to restructure business. These are the main
reason of the low FDI in India.

Lack of Improper Infrastructure:- It is the major reason to handle the improper Infrastructure
of the Industry. In the India there Are Poor infrastructure discourages the Foreign Investor’s
in investing India. It is the reason behind in the low FDI in India.

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Analytical Study For Foreign Direct Investment In India

Increasing determinants of Foreign Direct Investment in India

Economic Factors:- The economic factors can be increase the FDI in India. These Economic
Factors includes the tax rate, interest loan, subsides, grants and the removal of the
restrictions and limitations. The business needed the lots of tax exemption of the industry.

Low price labour :- There is abundant labour available in India in Terms of skilled and
unskilled human resources. The Foreign Investors will be the advantages of the low
price labour of the business.

Stable polices:- India stable economic and socio polices have attracted investors
across broder. Investor’s prefer countries which stable economic polices. If the
government makes changes in policie swhich can be affect on the investor’s business.

Need For FDI in India

Technological Gap:- In India scenario we need technical assistances from Foreign source for
provision if experts services, training of Indian personnel and educational, research, and
training institutes in the India.

Exploitation of natural resources:- In India we have abundant natural resources such as coal,
iron, and steel but to extract the resources we requires Foreign Collabration.

Understanding the real risk:- In developing countries as capital is a scare resources, the risk
of investments in new ventures or projects of industry are high. It is the main need of the
FDI in India.

There are two types of implementations

 Positive implementation
 Negative implementation

Positive implementation

36
Analytical Study For Foreign Direct Investment In India

 FDI provides the capital which is the missing target of the country as long term
capital is suitable for the Growth and economic development.
 To increases the foreign relations with the world powerful country.
 Devlopment the new technology of the country industries.
 The FDI provides the Large numbers employement in the country.

Negative implementation

 Repatriations of the profits can be stressful on the balance of payments.

 Missing the tax revenues- if the Foreign nations can be received the tax holidays or
similar provisions.
 Possible environment damage.
 Foreign corporations may buy a local company in order to shut it down.

Roles of Foreign Direct Investment in India

FDI generates the competitive environment in the host country:- With the drastic increases
in the FDI in India now the people has a lot more wider choice which leads of the higher
services and provided the better quality of the product to enter the Foreign companies and
industry.

FDI provide Employment:- Foreign Direct Investment provide the large number of the
employment in the India. They are generating the indirect employment opportunites as well
as further these employment are to be expected to be higher skill area.

Exports of the Host Country are promoted by the FDI’s:- Foreign companies are there global/
links or network of marketing, possessing marketing information are in a unique posiyion te
expand the strength to export the developing country like India, FDI directly promotions the
exports of the host country.

List of American and Russian companies Employment in India

American companies

Name of the company No. of the employment

Dell 10000-2000 employment
General Electronics 17800 employment
American Express 4000 employment

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Analytical Study For Foreign Direct Investment In India

Russian Companies

Name of the company No. of the employment

Cart Zeiss 8500 and growing employment
DHL Express 9500 and still growing employment
Adidas Marketing 9000-10000 employment

CONCLUSION

In Conculsion, Analytical study for Foreign Direct Investment in India beimg critical driver
from the economic growth of the devloping nation, It has become one of the major source
of non debt financial sources in India for the economic growth and devlopment. It has also
become an appearing concept through which MNC’s progess and entre into new markets as
a reslut of globalization.

Or we can say that India can attract more and more Foreign Direct Inveztment by proving
them large scale of workers with the low wages, abundant supply of trained and low wage
workers, largest demostic markets & also the second largest nation.

Market oriented polices are boosting economic activites, all over economic rate and
devlopment. As the India gears up the competition in the global market, overseas investors
clearly seen the potentional for great income on there investments in India which is already
evident from the great success story of FDI in India.

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Analytical Study For Foreign Direct Investment In India

REFERENCES

 Department of Indutrial policy and promotion (April 2000 to March 2018)

 Unctad (2017), world investment report
 Reserve Bank of India 2015, Yearly report
 Press Notes of Department of Industrial policy and Promotions
 Annual report on Foreign Direct Investment in India by Seccetariat for
industrial assistance (DIPP)
 Niti Bhasin, 2016. Foreign Direct Investment
 Wikipedia
 Google
 Bussiness Times News
 Bussiness Today , 5 May 2016, Rohit saran
 Sahni, p.(2015) trends and determinants of FDI in India. International journal
of Marketing and Technology
 Devajitr M. (2017) impact of FDI in India econmy
 Manoj Pant with deepika Srivastava , 2015. FDI in India
 Ms. Parul Mittal; Mr. Sandeep Aggarwal (2017), Analysis of FDI inflows and
outflows
 Dr. Patil Usha.N (2017), FDI in Indian Retail sector

39