Foreign Direct Investment

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Foreign Direct Investment

FDI or Foreign Direct Investment refers to the investment of foreign currency and other valuable resources by Multinationals into the host country.

FDI allows the host country to earn valuable foreign exchange that can be used for future imports or to pay off existing loans of the country. The Government of the host country controls the FDI levels in various segments of the economy such as Telecom, Retail, Tourism, Infrastructure, Research and Development, Automobile and so on.

Perhaps the biggest advantage of MNCs is the influx of valuable Foreign Exchange. FDI is required by a developing economy such as ours to tap unexplored resources and put them to more productive use.

A series of ambitious economic reforms aimed at stimulating foreign investment has moved India into the front ranks of the rapidly growing Asia Pacific region.

• The Finance Minister cleared 46 proposals of foreign direct investment (FDI) amounting to Rs 408.22 crore (US$ 93.4 million) in July 2004.

• With a half-billion strong middle class, consumer demand in India will grow sky high. According to some estimates, 487 million middle-class Indians will spend an additional $420 billion during the next four years.
It is evident. The investment scenario in India has changed. And the figures say that it is for the better.

• There has been a sharp rise in the number of FDIs approved in 2004. During the first seven months of 2004, between January and July, Rs 5,220 crore worth of FDI was approved.

• This figure, which accounts for only seven months of 2004, amounts to 96 per cent of the total FDI approved during the full year of 2003. The actual FDI inflow too is expected to surpass last year's figure -- during the first seven months of 2004 actual FDI inflow at Rs 9.503 crore was more than 80 per cent of what the country received in 2003.

In a bid to stimulate the sector further, the government is working on a series of ambitious economic reforms.

• The Centre has divested some of its own powers of approving foreign investments that it exercised through the Foreign Investment Promotion Board (FIPB) and has handed them over to the general permission route under the RBI.

• The FDI cap for aviation has been hiked from 40 to 49 per cent through the automatic route.

• The government has scrapped Press Note 18, which was acting as a deterrent to foreign investors.

• It has set up an Investment Commission that will garner investments in the infrastructure sector among others, and plans to increase the limit for investment in the infrastructure sector.

India's foreign exchange reserves rose $700 million to a record high of $120.78 billion in July 2004.
 
Foreign Direct Investment

FDI or Foreign Direct Investment refers to the investment of foreign currency and other valuable resources by Multinationals into the host country.

FDI allows the host country to earn valuable foreign exchange that can be used for future imports or to pay off existing loans of the country. The Government of the host country controls the FDI levels in various segments of the economy such as Telecom, Retail, Tourism, Infrastructure, Research and Development, Automobile and so on.

Perhaps the biggest advantage of MNCs is the influx of valuable Foreign Exchange. FDI is required by a developing economy such as ours to tap unexplored resources and put them to more productive use.

A series of ambitious economic reforms aimed at stimulating foreign investment has moved India into the front ranks of the rapidly growing Asia Pacific region.

• The Finance Minister cleared 46 proposals of foreign direct investment (FDI) amounting to Rs 408.22 crore (US$ 93.4 million) in July 2004.

• With a half-billion strong middle class, consumer demand in India will grow sky high. According to some estimates, 487 million middle-class Indians will spend an additional $420 billion during the next four years.
It is evident. The investment scenario in India has changed. And the figures say that it is for the better.

• There has been a sharp rise in the number of FDIs approved in 2004. During the first seven months of 2004, between January and July, Rs 5,220 crore worth of FDI was approved.

• This figure, which accounts for only seven months of 2004, amounts to 96 per cent of the total FDI approved during the full year of 2003. The actual FDI inflow too is expected to surpass last year's figure -- during the first seven months of 2004 actual FDI inflow at Rs 9.503 crore was more than 80 per cent of what the country received in 2003.

In a bid to stimulate the sector further, the government is working on a series of ambitious economic reforms.

• The Centre has divested some of its own powers of approving foreign investments that it exercised through the Foreign Investment Promotion Board (FIPB) and has handed them over to the general permission route under the RBI.

• The FDI cap for aviation has been hiked from 40 to 49 per cent through the automatic route.

• The government has scrapped Press Note 18, which was acting as a deterrent to foreign investors.

• It has set up an Investment Commission that will garner investments in the infrastructure sector among others, and plans to increase the limit for investment in the infrastructure sector.

India's foreign exchange reserves rose $700 million to a record high of $120.78 billion in July 2004.

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