Impact of Fdi to Farmers in India

Topics: Agriculture, India, Gross domestic product Pages: 7 (2143 words) Published: March 21, 2013
Shanmuga sundaram.S (MBA 1st year student Garden City College) ABSTRACT
The goal of this paper is to examine the opportunities, challenges, responsibilities and recommendations for Foreign Direct Investment (FDI) impact on farmers in India. Since last two decades India is the attractive and profit oriented market for the investment to developed countries. FDI is an easy path to enter the market of developing countries as India which has vast consumer market, big retail sector, reach aggregate demand, inadequate domestic supply, weak infrastructure, lack in technological background, political instability, low GDP, poor management skill, sick investment promotion strategies, government outlook towards investment, inadequate finance and unemployment all these factors are responsible for the attraction of developed countries about FDI in India. This paper will give a brief explanations regarding how FDI is going to help farmers in India in sectors like Agriculture, Seed production and Retail sector in India and the conclusion part will show that India needs FDI but it must help everyone in India to be benefited.

KEY WORDS; FDI, Agriculture, Seed production, Consumer market, Aggregate demand, GDP,

Today the hot most debated topic and emotive reactions are because of FDI in India is one of the most stirring and promising markets in the globe. Technical and Skilled human resources are the finest available in the world. Private sector is the lifeblood of economic activity in India which is energetic and well spirited. Middle class population of India is greater than the population of the USA or the European Union which provide India a key place in International competition. Starting from a baseline of less than $1 billion in 1990, India reached more than $24.2 billion to FDI in 2010. A recent UNCTAD survey projected, India as the second most important FDI destination (after China) for transnational corporations during 2010–2012.The significance of FDI is rising heavily due to its all round contributions to the growth of economy.FDI in developing countries like India will help to improve the current GDP. And in India Agriculture is an important sector of Indian economy and accounts for 15% of the Indian gross domestic product (GDP) Agriculture is the backbone of Indian economy if farmers are happy the entire country will move to a success path ahead the role of FDI must benefit the farmers as to go to a strong economic path the farmers must not only produce and sell their product but must make a value added product and the role of FDI must make farmers of India to turn as an entrepreneurs.

The FDI inflows to Agriculture services are allowed up to 100% and allowed through the automatic route covering horticulture, floriculture, development of seeds, animal husbandry, pisciculture, aqua culture, cultivation of vegetables, mushroom and services related to agro and allied sectors. Agriculture is the main stay of the Indian economy as it form the backbone of rural India which inhabitants more than 70% of total Indian population. Only in tea sector 100% FDI is allowed with prior permission. In a statement the department of industry policy and promotion in the ministry of commerce and industry said that FDI policy vide press note 4(2006series) dated February 10 2006 was rationalised. Further it requires company divestment of 26% equity in favour of the Indian partner or Indian public within a maximum period of five years. This also requires approval from the concerned state government in case of change in use of land for such activities.

* Farm credit target of 2’25’000 crore for the year 2007-08 has been set with an addition of 50 lakh new farmers to the banking system. * 35 projects have been...
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