1. PRESENTED BY
RADHEY SHAYAM KUMAWAT

2. Foreign Direct Investment
Purchase of physical assets or a significant amount of the ownership
(stock) of a company in another country to gain a measure of
management control
Portfolio investment
Investment that does not involve obtaining a degree of control
in a company

3. Automatic Route
Prior Permission
(FIPB)
Investing in India
General Rule
No prior permission
required
Inform Reserve Bank
within 30 days of
inflow/issue of shares
By Exception
Prior Government
Approval needed.
Decision generally
within 4-6 weeks
Automatic Route
General Rule
No prior permission
required
Inform Reserve Bank
within 30 days of
inflow/issue of shares
Prior Permission
(FIPB)Automatic Route
General Rule
No prior permission
required
Inform Reserve Bank
within 30 days of
inflow/issue of shares
By Exception
Prior Government
Approval needed.
Decision generally
within 4-6 weeks
Prior Permission
(FIPB)
Automatic Route
General Rule
No prior permission
required
Inform Reserve Bank
within 30 days of
inflow/issue of shares

4.  Increase investment level and thereby income & employment
 Increase tax revenue of government
 Facilitates transfer of technology
 Encourage managerial revolution through professional
management
 Increase exports and reduce import requirements
 Increase competition and break domestic monopolies
 Improves quality and reduces cost of inputs

5.  Flow to high profit areas rather than main concern areas
 Through their power and flexibility, MNC can undermine
economic autonomy and control
 Sometimes interferes in the national politics
 Sometimes engage in unfair and unethical trade practices
 Sometimes result in minimizing / eliminating competition and
create monopolies or oligopolistic structures

6. Year India(Amount US $ Billion)
2001 4.02
2002 6.13
2003 5.03
2004 4.32
2005 6.05
2006 8.961
2007* 17.59
*Jan.- Nov.*Jan.- Nov.
Source- 1.Source- 1. http://siteresources.worldbank.org/CHINAEXTN/Resources/chinaei.pdfhttp://siteresources.worldbank.org/CHINAEXTN/Resources/chinaei.pdf
2. www.rbi.org.in2. www.rbi.org.in

7. FDI equity limit-
Automatic route
 Insurance – 26%
 Domestic airlines – 49%
 Telecom services- Foreign
equity 74%
 Private sector banks- 74%
 Mining of diamonds and
precious stones- 74%
 Exploration and mining of coal
and lignite for captive
consumption- 74%
FDI requiring
prior approval
 Defense production – 26%
 FM Broadcasting - 20%
 News and current affairs- 26%
 Broadcasting- cable, up-
linking – 49%
 Trading- wholesale cash and
carry, export trading, etc.,
100%
 Tea plantation – 100%
 Development of airports-
100%
 Courier services- 100%

8.  Engineering & Manufacturing sectors
 Roads & Highways, Ports and Harbors
 Industrial model towns/industrial parks
 Hotels & Tourism
 Pollution Control and Management
 Advertising & Film industry
 Power generation (hydro-electric, coal/lignite, oil or gas based)
 Information Technology including E-Commerce

9.  Profitability: Attract where return on investment is higher
 Costs of production: Encouraged by lower costs of production like
raw materials, labor .
 Economic Conditions: Market potential, infrastructure, size of
population, income level etc
 Government policies: Policies like foreign investment, foreign
collaboration, remittances, profits, taxation, foreign exchange
control, tariffs etc.
 Political factors: Political stability, nature of important political
parties and relations with other countries.

11.  Foreign Institutional Investors (FIIs) are allowed to invest in the primary
and secondary capital markets in India through the portfolio investment
scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures
of Indian companies through the stock exchanges in India

12. List of companies in which FII investment is allowed
upto limits fixed by companies as indicated against their
names
1 Amtek Auto Ltd (74%)
2 Advanta India Limited 49%
3 Amtek India Ltd (74%)
4 Ahmednagar Forgings Ltd (74%)
5 Anant Raj Industries Ltd. (40%)
6 ANG Auto Ltd (49%)
7 Apollo Hospitals (74%)
8 Aptech Ltd (74%)
9 Arshiya International Limited (49%)
10 Bombay Rayon Fashions Ltd (40%)

13. Year 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07(P)
FIIs*
(US $ Milloin)
2009 1926 979 -390 2,135 1847 1505 377 10,918 8,686 9,926 3,225
Foreign Institutional Investors(FIIs) in India
*Represents inflow of funds (net) by Foreign Institutional Investors (FIIs).
Source:-RBI Bulletin of 13th Feb 2008.
Net inflows by foreign institutional investors (FIIs) aggregated to US $ 26.8 billion during the current financial year so far (up to
January 11, 2008). The number of FIIs registered with the SEBI increased from 997 at end-March 2007 to 1,219 at end-December
2007.

14.  The main objective of the study is to know about in which sector the
industries are invest our money FDI or FII.
 To identify factors which inhibit higher FDI or FII flows and suggest
remedial steps.
 To examine policy reforms towards mergers and acquisition for attracting
FDI or FII
 To suggest changes in institutional apparatus and organizations, both in
Centre and States, for attracting the FDI or FII flows.