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FDI

foreign direct investment
by

shivam kharb

on 10 April 2013

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Transcript of FDI

TYPES OF FDI FDI BY DIRECTION INWARD OUTWARD BY TARGET HORIZONTAL VERTICAL BY MOTIVE RESOURCE SEEKING
MARKET SEEKING
STRATEGIC ASSET SEEKING
EFFICIENCY SEEKING BY ENTRY MODES GREEN-FIELD VENTURES MERGERS & ACQUISITIONS Some arguments in favor of FDI: EMPLOYMENT BENEFIT FARMERS CHOICE BETTER DISTRIBUTION SYSTEMS HEALTH TO ECONOMY Some arguments against FDI: MARKET PRICES LOCAL JOBS COULD BE AT THREAT ADVENT OF FDI AND A country’s INFRASTRUCTURE Procedure of FDI in India FDI is permitted as under the following forms of investments – •Through financial collaborations.
•Through joint ventures and technical collaborations.
•Through capital markets via Euro issues.
•Through private placements or preferential allotments Forbidden Territories –
FDI is not permitted in the following industrial sectors:
•Arms and ammunition.
•Atomic Energy.
•Railway Transport.
•Coal and lignite.
•Mining of iron, manganese, chrome, gypsum, sulphur, gold, diamonds, copper, zinc. Sectoral Caps/Limits on Investments
Hotel & Tourism
Housing and Real Estate
Power 100%
Drugs & Pharmaceuticals
Roads and highways, Ports and harbours SHARE OF TOP INVESTING COUNTRIES FDI EQUITY INFLOWS What is the difference between a franchise (e.g.: Dominos, Pizza Hut) and an FDI module? Case study of Coca-Cola first international soft drinks brand to enter India in early 1970s RBI's move on Foreign Equity Regulation In 1974, Multinationals were asked by
RBI to step down equity to 40%
either through equity dilution or
through equity sale Coke offered to hold 40% equity in its bottling and distribution units but not in technical and administrative unit FERA permitted not more than a 40 % holding in all operations Coke left India and didn't return for nearly two decades RE-ENTRY DANGER FOR SMALL STORE OWNERS THANK YOU Private Sector Banking 49% Telecommunications 49% Insurance 26% MINING 74%
DIAMOND

GOLD & SILVER 100%
Full transcript