FDI is a source of Indian Economic Growth

abhilasha By abhilasha, 27th Jun 2018 | Follow this author | RSS Feed | Short URL http://nut.bz/3ohp8xtx/
Posted in Wikinut>Business>Accounting & Finance

Because of FDI, We have financial stability and economic growth with the help of investments in different sectors.There has been a positive GDP growth rate in country’s economy,after liberalization of trade policies.

FDI helps in generating employment, generating revenues in the form of tax and incomes, development of infrastructure, backward and forward linkages to the domestic firms for the requirements of raw materials, tools, business infrastructure, etc

How to make FDI in India

In the form of financial collaborations, joint ventures, technical collaborations, capital markets and private placements FDI can be done.
There are some sectors which require prior approval of Reserve Bank of India (RBI) or Foreign Investment Promotion Board (FIPB) for e.g. manufacture of cigarettes and tobacco, manufacture of electronic aerospace and defence equipments, manufacture of items exclusively reserved for small scale sector with more than 24 per cent overseas investment and all other proposals falling outside notified sectoral policy.

The foreign investors can invest in India in two ways:

Incorporation of an Indian company : The foreign investor can have a separate legal entity in India under the provisions of the Companies Act, 1956. Based on sectoral guidelines specified by the Government of India, The foreign investors can invest in such Indian company up to 100 per cent of capital.
Unincorporated entity : Subjected to conditions and activities permitted under the Foreign Exchange Management Regulations, A foreign company can operate in India, by establishing a Branch Office of the other place of business (foreign entity).

Who can invest in India

Within FDI Policy under government route plans, a non-resident of India can invest in India.
In India under various SEBI guidelines, Qualified financial Investors (QFIs) are allowed to invest through SEBI registered Depository Participants only in the equity shares of listed Indian companies through recognised stock exchanges.
Foreign institutional investors can invest in the capital markets in India through the portfolio investment scheme (PIS).


Fdi, Fdi Is A Source Of Indian Economic Growth, Impact Of Fdi On Indian Economy

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