2. Foreign Investments:
Foreign Investment consists
of flows of capital from one nation to
another country.
Foreign Collaborations:
Foreign collaboration is an
agreement or contract between two or more
companies from different countries for
mutual benefit.
3. To Sustain a high level of Investment
To fill the Technological Gap
To undertake the Initial Risk
To exploit the natural Resources
To develop basic Economic Infrastructure
To improve the Balance of Payments position
4. Role of foreign capital in the development
To facilitate the Import of Investment
Oriented items
To Help in the Capital formation
To Help in Reducing the Foreign Exchange
Gap
5. Private foreign capital helps in increasing the
investment level and income also.
It is increase the export and import
requirements.
It is useful to transfer of technology and
ideas.
6. Distort of the Pattern of Development of the
Economy
Adverse Effect on Domestic Savings
Adverse Effect on Balance of Payments of the
Recipient Country
It does not provide hope for their rapid
industrialization and economic growth
7. Lack of Infrastructural Facilities
Lack of personnel
Lack of raw materials and Inputs
Lack of feasible projects
Inadequacy of markets
11. Foreign direct investment:
A foreign direct
investment (FDI) is a controlling ownership in
a business enterprise in one country by an
entity based in another country.
portfolio investment:
If the Investor only subscribes
to the shares,bonds,debentures or other
securities abroad,it is called portfolio
investment.
12. Wholly owned subsidiary:
A wholly owned subsidiary is a
company whose common stock is 100% owned by
another company, called the parent company.
Joint Venture:
An association of two or more individuals or com
panies engaged in a solitary business ent-
erprise for profit is called a joint venture.
Acquisition:
The purchase of one business enterprise
by another: the acquisition of a rival
corporation
13. Investments by FIIS:
Foreign institutional investors (FIIs)
are those institutional investors which invest
in the assets belonging to a different country.
Investments in GDRs & FCCBs:
Foreign Currency Convertible Bond (FCCB) is
a type of convertible bond issued in a
currency different than the issuer's domestic
currency.
Global depositary receipt (GDR) is
a bank certificate issued in more than one
country for shares in a foreign company.
14. The late prime minister Jawaharlal Nehru
made a statement in april 1949. Three
important assurances to foreign investors:
The Government of India would not make any
discrimination between foreign and local
undertakings
Foreign exchange position permitting
reasonable facilitates would be given to
foreign investors
If and when foreign enterprises are
compulsory acquired compensation would be
paid on a fair and equitable basis.
15. ֎The industrial policy resolution of 1948 and
1956 mr.Nehru’s statement on foreign capital
constitute the basis of the Government’s
policy on foreign capital .following important
aspects of the policy:
Foreign Investment
Foreign Technical Collaboration
Foreign Exchange Regulation
Act,1973 (FERA)
16. The New Industrial Policy 1991 can be described as a
minor revolution as far as decisions concerning
foreign investments and foreign technology
agreements are concerned.
Liberalising the industry from the regulatory devices
such as licenses and controls.
Enhancing support to the small scale sector.
Increasing competitiveness of industries for the
benefit of the common man.
Ensuring running of public enterprises on business
lines and thus cutting their losses.
Providing more incentives for industrialisation of the
backward areas, and
Ensuring rapid industrial development in a
competitive environment.
17. ≈ All but 26 industries were exempted from
licensing in case non MRTP and non FERA
companies
≈ Private sector was allowed to participate in
the manufacture of telecommunications
equipment
≈ A number of electronic items were
exempted from the MRTP Act
≈ Broad banding of a license for a number of
industries were allowed
18. ¡ In 1991 India had encouraged foreign
investment by Indian companies
¡ Nowdays Indian companies have set up fully
owned subsidiary abroad
¡ There are 733 active wholly susbsidiary in
india
¡ It useful develop the company and economic
conditions
19. India should improve its regulatory system
through better and effective monetary and
fiscal reforms
There should be favourable economic
environment in terms of increasing efforts
like provision of subsidised raw material,
power, land and tax concession
Study also reveals that FDI promotes
economic growth of a country through its
positive influence on GDP, exports, reserves
and employment
