1. Fdi in india
PRESENTED BY
K.Kiruthiga
Nirosha
R.Ramya
M.Saravana kumar
P.Sathya

2. introduction
The Foreign Direct Investment means “cross border
investment made by a resident in one economy in an
enterprise in another economy, with the objective of
establishing a lasting in the investee economy.

3. THE PURPOSE FOR WHICH THE
COUNTRIES SEEK FDI
•Domestic capital is inadequate for the purpose of
economic growth.
•Foreign capital is usually essential, at least as a
temporary measure, during the period when the
capital market is in the process of development.
•Foreign capital usually brings it with other scarce
productive factors like technical knowhow, business
expertise and knowledge.

4. FOREIGN DIRECT INVESTMENT
IN INDIA
•Foreign Direct investment was introduced in 1991
•It was introduced as Foreign Exchange
Management Act (FEMA), driven by our former
Finance minister Manmohan Singh.
•Starting from a baseline of less than $1 billion in
1990

5. FORMS OF FDI
•Greenfield Investment
•Mergers &Acquisition
•Horizontal FDI
•Vertical FDI

6. ADVANTAGES OF FDI IN INDIA
•Economic Growth
•Increase trade
•Superior quality products
•Increase employment opportunity
•Outsourcing of knowledge
•Increase investment by joint-ventures
•Reduce intermediaries involvement
•Bringing down prices at retail level and calm
inflation

7. Cont…
•Bigger market for small and medium enterprises
and better branding.
•Bring foreign investment and global practices
•Induce better competition
•Introduce cost effective manufacturing technology
•Handling issues and challenges faced by two
wheeler industry in India including fuel
technology, development of nurturing practices for
working manpower

8. DISADVANTAGES OF FDI
IN INDIA
•Limited employment generation to semi-illiterate
people
•Fear of lowering of prices
•drain out the country’s share of revenue to foreign
countries
•loss of market share by domestic organization

9. Cont…
•Small retailers and other ‘Kirana Stores’ may close
down
•Supermarkets will establish their monopoly in the
Indian market
•Domestic companies may lose their ownership
•Loss of control by Government

10. 7 MAJOR SECTORS
ATTRACTING FDI IN INDIA
•Infrastructure
•Automotive
•Retail and consumer products
•Technology
•Financial service
•Life sciences
•Cleantech

11. SECTOR WHERE FDI IS NOT
ALLOWED IN INDIA
•Atomic energy
•Lottery business
•Gambling and betting
•Business of chit fund
•Nidhi company
•Agriculture and Plantation activities
•Housing and Real Estate business
•Trading in Transferable Development Rights(TDRs)
•Manufacture of cigars, cheroots, cigarillos and
cigarettes, of tobacco or of tobacco substitutes.

12. THE KEY CHANGES PROPOSED UNDER
THE FDI LIMITS ARE AS FOLLOWS
Sector/Activity
Before the proposal After the proposal
% of FDI /Equity Entry Route % of FDI / Equity Entry Route
Defense Sector 26%
Government
Route
No Change
Higher limits of foreign
investment in "state of-the-art"
manufacturing would be
considered by the CCS
Insurance
Sector
26% Automatic Route 49% Automatic Route
Telecom
Services
74%
Automatic up to
49% Government
route beyond 49%
and up to 74%
100%
Automatic up to 49%
Government route beyond 49%
and up to 100%
Tea Plantation 100%
Government
Route
100%
Automatic up to 49%
Government route beyond 49%
and up to 100%

13. Cont…
Sector/Activity Before the proposal After the proposal
Asset Reconstruction
Company
74% of paid-up capital
of ARC (FDI+FII)
Government
Route
100%
Automatic up to 49%
Government route beyond 49%
and up to 100%
Petroleum & Natural
Gas
49%
Government
Route
49% Automatic Route
Commodity Exchanges
49% (FDI & FII) +
[Investment by
Registered FII under
Portfolio Investment
Scheme (PIS) will be
limited to 23% and
Investment under FDI
Scheme limited to 26% ]
Government
Route (For FDI)
49% Automatic Route
Power Exchanges
49% (FDI &FII) FDI limit
of 26 per cent and an
FII limit of 23 per cent of
the paidup capital
Government
Route (For FDI)
49% Automatic Route

14. Cont…
Sector/Activity
Before the proposal After the proposal
% of FDI /Equity Entry Route
% of FDI /
Equity
Entry Route
Credit Information
Companies
49% (FDI & FII)
Government
Route
74% Automatic Route
Courier Services 100%
Government
Route
100% Automatic Route
Single Brand product
retail trading
100%
Government
Route
100%
Automatic up to 49%
Government route beyond
49% and up to 100%

15. PROCEDURES FOR RECEIVING
FDI IN INDIAN COMPANY
•Automatic Route
•Government Route

16. A two-stage reporting procedure of
Automatic Route or Government approval
1. On receipt of money for investment
The report to the Regional Office of RBI
containing details such as:
•Name and address of the foreign investors
•Date of receipt of funds and their rupee equivalent
•Name and address of the authorized dealer
through whom the funds have been received, and
•Details of the Government approval, if any;

17. Cont…
2. On issue of shares to foreign investor
A report in Form FC-GPR (Foreign
Collaboration - General Permission Route
should be filed with the Regional Office of RBI
with required documents

18. AUTHORITIES DEALING WITH
FOREIGN INVESTMENT
•Foreign Investment Promotion Board (FIPB
•Secretariat for Industrial Assistance (SIA):
•Foreign Investment Implementation Authority
(FIIA).
•Investment Commission
•Project approval Board
•Reserve Bank of India

19. THE TOP 10 NATIONS INVESTING IN
INDIA
•Mauritius - Investment: Rs 247,092 crore ($55,203
million)
•Singapore - Investment: Rs 58,090 crore ($13,070
million)
•United States of America - Investment: Rs 42,898 crore
($9,529 million)
•The United Kingdom - Investment: Rs 29,451 crore
($6,643 million)
•The Netherlands - Investment: Rs 25,799 crore ($5,739
million)

20. Cont…
•Japan - Investment: Rs 25,001 crore ($5,511 million)
•Cyprus - Investment: Rs 22,702 crore ($4,982
million)
•Germany - Investment: Rs 13,607 crore ($3,051
million)
•France - Investment: Rs 11,244 crore ($2,484
million)
•United Arab Emirates - Investment: Rs 8,683 crore
($1,910 million)

21. SUGGESTION
We suggest that FDI is beneficial to our country
since we are developing. Every activity has its own
benefits and drawbacks. The important is which
one is dominating. According to our point of view
FDI is welcomed one due to the reasons such as
•High employment opportunities
•Growth of government revenue by bringing the
foreign currencies into India.
•Increasing exports.
•International standard products

22. Thank you