School of Commerce
Table of Contents
2. Why MNC prefer FDI
3. Reasons for FDI in India and China
4. Quality of FDI Inflows in India and China
5. Growth of FDI in the market of India and China
6. The changing pattern of FDI
7. Why India Lags Behind China in FDI
It is important to understand the significance of FDI in global trade and in economic development. The simple definition of FDI would be –“An investor based in one country acquires an asset in another country with the intent to manage that asset” (OECD, 2000).The FDI trend in last ten year indicates a shift of flow from developed world to developing world and emerging markets such as China and India. Both India and China had highly restrictive trade regimes until the late 1970s. Both employed a variety of overlapping restrictions, some of which were either redundant or mutually canceling. Both began to open to international trade in the late 1970s in modest ways but China moved faster. India’s liberalization became systematic only with the launch of the major reform package of 1991. In the 1990s and beyond, India undertook considerable liberalization of not just merchandise trade, services trade but also foreign direct investment.
This study to answers the question such as what has India done till now to attract FDI? What has been China’s strategy to become the most FDI attracting country in the world? What are the effects of FDI on economy of India and China? Why China gets USD 90.033 billion (2009) FDI annually as compared to India that does not even get US 4.4 billion dollars... [continues]
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