Inflow of Funds Through Foreign Direct Investment in India- Analysis

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Enclosed please find an abstract and paper on 'Inflow of Funds through Foreign Direct InveINFLOW OF FUNDS THROUGH FOREIGN DIRECT INVESTMENT IN INDIA – Analysis for your kind perusal and to become a subscriber in this site. thanks.

M.Ganesh, Faculty in MBA,
Thanthai Hans Roever College, Perambalur
ganeshm67@gmail.com
and
K.Soundarapandiyan, Faculty in MBA,
Sri SaiRam Engineering College Chennai-44
Soundrap_mba@yahoo.com

ABSTRACT
Foreign Direct Investment (FDI) is considered to be the lifeblood for economic development as far as the developing nations are concerned. Since the liberalization of the Indian economy inflows of foreign direct investment has greatly increased. As far as forting direct investment is concerned, its flow in India is very small as compared not only to China but also to India's potential. Economic Survey for 2005-06 points out that India has potential to absorb $150 billion FDI in the infrastructure sectors alone by 2010.Most of the FDI inflows come from a few countries. Between 1991 and 2005, investments of 10 countries accounted for 71 percent of FDI, the main investor countries being the USA, the Netherlands, Japan, and the United Kingdom. With regard to FDI, U.S. is one of the largest foreign direct investors in India. India is becoming an attractive location for global business on account to its buoyant economy, its increasing consumption market, and its needs in infrastructure and in the engineering sector. Opening and FDI have really created new opportunities for India's development and boosted the performances of local firms as well as the globalization of some of them. Such a trend has undeniably raised Indian's stature among developing countries.

INTRODUCTION:
Foreign direct investment (FDI) is considered to be the lifeblood for economic development as far as the developing nations are concerned. FDI to developing countries in the 1990s was the leading source of external financing. The rise in FDI volume was accompanied by a marked change in its composition. That is investment taking the form of acquisition of existing assets (mergers and acquisitions) grew much more rapidly than investment in new assets particularly in countries undertaking extensive privatization of public enterprises.Foreign Direct Investment (FDI) is defined as "investment made to acquire lasting interest in enterprises operating outside of the economy of the investor." A Company from one country obtains controlling interest in a (new or existing) firm in another country, and then operates that firm as a part of the multinational business of the investing firm. FDI may be financed through parent company transfer of funds to the new affiliate, borrowing from home-country lenders, borrowing in the host country by the parent company, or any combination of these strategies. OBJECTIVES:

To find out FDI flows in India between 1990-1991 and 2005-2006. To analyze at least top 10 recipients of FDI in the year 2004-'05. To find out the sector that attracts FDI in flows with special reference to Indian Union States. To assess the FDI in flows to India especially from US and China. To find out the benefits of FDI and the advantage that an Indian Companies realize through FDI. To re assess the major new FDI inflows.

Methodology:
The objective of the study is to find out the FDI inflows right from liberalization to till now and the benefits that the Indian Companies take advantage through FDI and finally summarize few major FDI inflows. Limitations:

The entire study is based on the secondary data obtained from newspapers, journals, magazines and concerned web sites. The study period is restricted to the period between 1991 and 2005. FOREIGN DIRECT INVESTMENT FLOWS IN INDIA

Since the liberalization of the Indian economy inflows of foreign direct investment has greatly increased. As shown in the below table total foreign...
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