LIMITATION OF FOREIGN DIRECT INVESTMENT.
Foreign direct investment is not free from limitations. Developing countries like India has very little choice when it comes to opening the different sectors of the economy to foreign investment. A case in point is the opening up of the consumer non-durable industry to foreign investment.
Eg :- The advent of Pepsi and Coke saw the exit of domestic soft drink manufactures and the emergence of a duopoly. Similarly, the experience with regard to FDI in the power sector has been far from desirable. The governments of developing countries must be able to channelize FDI in the most desirable areas of investment and the government policy towards FDI should be stable over the long run.
SUMMARY
India, the 4th largest economy in the world is undoubtedly one of the most preferred destinations for foreign direct investments (FDI) as India has proven its caliber in the field of information technology and a host of other significant arenas.
The latent strength of India has made it one of the most exciting emerging markets in the world. The strength of India is its skilled managerial and technical manpower that matches the best available in the world. The size of middle class population, a vital part of India, exceeds the population of the USA or the European Union so it provides India with a distinct cutting edge in global competition. Apart from that India’s time tested institutions offer foreign investors a transparent environment that guarantees the security of their long term investments in this promising land.
India’s liberalized economy was a big boon for investors as the updated FDI policy allows a 100% FDI stake in a venture in few sectors. The industrial sector was among the first sectors to be liberalized in India in a series of measures. The industrial policy reforms have substantially reduced the industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and foreign direct investment FDI. These factors make India one of the hottest destinations for FDI investment across the globe.
Foreign direct investment is not free from limitations. Developing countries like India has very little choice when it comes to opening the different sectors of the economy to foreign investment. A case in point is the opening up of the consumer non-durable industry to foreign investment.
Eg :- The advent of Pepsi and Coke saw the exit of domestic soft drink manufactures and the emergence of a duopoly. Similarly, the experience with regard to FDI in the power sector has been far from desirable. The governments of developing countries must be able to channelize FDI in the most desirable areas of investment and the government policy towards FDI should be stable over the long run.
SUMMARY
India, the 4th largest economy in the world is undoubtedly one of the most preferred destinations for foreign direct investments (FDI) as India has proven its caliber in the field of information technology and a host of other significant arenas.
The latent strength of India has made it one of the most exciting emerging markets in the world. The strength of India is its skilled managerial and technical manpower that matches the best available in the world. The size of middle class population, a vital part of India, exceeds the population of the USA or the European Union so it provides India with a distinct cutting edge in global competition. Apart from that India’s time tested institutions offer foreign investors a transparent environment that guarantees the security of their long term investments in this promising land.
India’s liberalized economy was a big boon for investors as the updated FDI policy allows a 100% FDI stake in a venture in few sectors. The industrial sector was among the first sectors to be liberalized in India in a series of measures. The industrial policy reforms have substantially reduced the industrial licensing requirements, removed restrictions on expansion and facilitated easy access to foreign technology and foreign direct investment FDI. These factors make India one of the hottest destinations for FDI investment across the globe.