Sumbitted by-Amritansh Soni (IC181104)
Nitin Jeendgar (IC181142)
Aadarsh Jain
(IC181144)
Sanskar Tripathi(IC181154)
Sammar Singhai(IC181158)
Introduction
FDI vs FPI
History
Recent Trends
Steps taken by Government
Advantages
Every country requires capital or funds for its
economic growth
FDI ANF FPI are the two most important
sources of funds
In union Budget we commonly heard about
these words in context to stock market and
development
However they refer to foreign investments but
they are not interchangeable
It is an investment in the form of a controlling
ownership in a business in one country by an entity
based in another country.
Thus it involves establishing a direct business and
is mostly taken by large MNCs and Institutions.
It involves transfer of funds, technologies etc.
Example-Acquisition of stake in Flipkart by
Walmart
It refers to investing in the financial assets
of a foreign country, such as stocks or bonds
available on an exchange.
These securities are more liquid
It can be done for both i.e either short term
and long term
The history of Foreign Investments can be tracked with
the establishment of EAST INDIA COMPANY.
After Second World War, Japanese companies entered
Indian market and enhanced their trade with India.
The industrial policy of 1965, allowed MNCs to venture
through technical collaboration in India
After the 1990s the government opened the door for
FDI INFLOWS and adopted a more liberal policies.
Starting from an investments of less then 1billion usd
dollar today India is the most important destination for
the FDIs
Telecommunication
Construction
Airlines
2005-Policy changes allowed 100% equity
2007- Increase due to increasing M&As like Tata
steel and Corus
2008- Fall due to the Global Financial Crisis
2011-As share prices fell foreign investment was
focused on sectors like oil and gas , pharmaceutical
companies. Housing fell.
2012- Slowdown cased increased inflation
2013-Out of slowdown.
2016- Fall as startup India was introduced.
2019-Relaxsation in defense, psu sectors
2020-Fall due to lockdown but had some increase in
investment in digital sector. Inc of 13 % while fall 42%
RANK
COUNTRY
% OF INFLOW
1
Mauritius
38
2
Singapore
10
3
UK
9
4
Japan
7
5
U.S.A.
6
6
Netherland
4
7
Others
26
TOTAL
100
RANKS
SECTORS
Percentage
1
Service Sector
20
2
Telecommunication
8
3
Construction
7
4
IT Companies
7
5
Real estate
7
6
Pharma
6
7
Power
4
8
Automobile
4
9
Petroleum
3
Government has allowed to pick 100% stake in
Air India
Government allowed 26% investments in the
digital sector
100% FDI was also allowed in Insurance
intermediaries.
Companies which set up their project in SEZ do
not have to pay taxes for five years
Renewal of FDI Policy in the defense sector.
100% FDI under automatic route in Coal mining
Budget 19-20 also talked about opening FDI in
Media and Animation
FDI limit has been increased to 74% from 49%
Amazon India announced an investment of US
$1 Billion for digitalizing small business
Jio sold 22% of its stake to the global
investors.
Mastercard planned to invest US$ 1 Billion
over next 5 years
Acquisition of 37% stake in Adani Gas by
French and Oil and Gas
Huge buying by the FIIs in the Indian Market
Increase Employment
Development of Backward areas
Exchange rate stability
Improved Capital flow
Competitive Market
Increase In Exports
Provision of Finance and Technology
India will be one of the countries attracting
highest foreign investments in the coming
year
Though there was a setback due to Covid19
but now the demand has returned to pre
Covid levels
As per UBS India is going to attract US$75
billion over next 5 years.
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