A complete picture about foreign investment in India

1. TREND AND PATERN
OF FDI IN INDIA
&
ROLE OF MNCs

3. PATERN OF FDI INFLOWS
3 PHASES
1. Phase of cautious and selective attitude to wards
FDI (1948-1967)
2. Phase of restrictive attitude towards FDI (1968-
1979)
3. Phase of semi liberalisation (1980-1990)
4. Phase of liberalisation (1991 onwards)

4. PHASE I TO IV
Source : RBI Bulletin (Various issues)

5. Source : UNCTAD, World investment report
FDI INFLOWS IN INDIA :1980-1990 (US$
MILLION)

7. COUNTRY WISE FDI INFLOWS
Source : RBI Bulletin (1948-1990)

8. (1980)

11. SECTOR WISE FDI INFLOWS

14. OBJECTIVE OF REFORMS
 In 1991, the government announced a specified list of
high technology and high-investment priority industries
wherein automatic permission was granted for foreign
direct investment (FDI) up to 51 percent foreign equity.
The limit was raised to 74 percent and subsequently to
100 percent for many of these industries. Moreover,
many new industries have been added to the list over
the years.
 Foreign Investment Promotion Board (FIPB) has been
set up to negotiate with international firms and approve
direct foreign investment in select areas.
 Steps were also taken from time to time to promote
foreign institutional investment (FII) in India.

15. FDI : APPROVAL VS ACTUAL (1991-08)
S
:
R
B
I
,
S
I
A

17. FINANCIAL
YEAR
TOTAL
INFLOWS
% Growth over last
year
2009-10 37745 -08%
2010-11 34847 +34%
2011-12 46847 +34.4%
2012-13 34298 -0.3%
2013-14 36046 +5.1%
2014-15 45148 +25.25%
2015-16 55559 +23.06%
2016-17 60220 +8.40%
Source: RBI Bulletin 2017

19. S.
N
COUNTR
Y
199
3
1995 199
9
200
1
2005 2008 2011 2014
1 Mauritius NA 197 590 843 830 9518 5616 3695
2 U.S.A 22 203 453 320 469 950 1071 617
3 U.K 7 144 NA 61 84 508 538 111
4 Germany 21 35 114 113 84 486 163 650
5 Netherlan
d
21 45 53 76 196 601 1417 1157
6 Japan 26 95 235 156 122 457 1256 1795
7 France 9 14 NA 93 44 136 486 229
8 Others 174 139 555 248 444 5885 4392 7799
9 Total 280 827 200
0
298
8
2320 18541 14939 16053
COUNTRY WISE FDI INFLOWS (US$ Million)
Source : RBI Annual report (Various)

20. S.
N
INDUSTRY 1991 2001 2005 2008 2010 2013 2016
1 SERVICE
2 CONSTRUCTIO
N
3 SOFTWARE
4 TELECOMMUNI
CATION
5 AUTOMOBILE
6 PHARMACEUTI
CALS
7 CHEMICALS
8 TRADING
9 POWER
SECTOR WISE INFLOWS

26. TOP MNCS OPERATING IN INDIA

28. ADVENTAGES OF MNCS
 Higher level of investment
 Reduction in technological gap
 Optimum utalisation of natural resources
 Boost basic economics structure – decrease foreign
exchange gap
 Growth of middle class
 Infrastructural balance

29. DISADVENTAGES
 Competition to MSME
 Pollution and environmental hazard
 Improper diffusion of profits
 Forex imbalances
 Encouragement of inessential consumption
 Child labour