Review of Litrature of Financial Statement Analysis of Manufacturing Companies

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SRI MANAKULA VINAYAGAR ENGINEERING COLLEGE (AFFILIATED TO PONDICHERRY UNIVERSITY)

MADAGADIPET, PUDUCHERRY

DEPARTMENT OF MANAGEMENT STUDIES

PAPER PRESENTATION

ON

IMPACT OF FDI IN RETAIL & AVITATION

AUTHOR: Leo U

MASTER OF BUSINESS ADMINISTRATION

EMAIL ID: leobeni42@ gmail.com

CO AUTHOR: ARUL KUMAR

MASTER OF BUSINESS ADMINISTRATION

IMPACT OF FDI IN RETAIL & AVITATION

INTRODUCTION

Foreign Direct Investment

DEFINITION

According to the International Monetary Fund,[->0] foreign direct investment, commonly known as FDI, "refers to an investment made to acquire lasting or long-term interest in enterprises operating outside of the economy of the investor." The investment is direct because the investor, which could be a foreign person, company or group of entities, is seeking to control, manage, or have significant influence over the foreign enterprise.

IMPORTANCE

FDI is a major source of external finance which means that countries with limited amounts of capital can receive finance beyond national borders from wealthier countries. Exports and FDI have been the two key ingredients in China's rapid economic growth. According to the World Bank,[->1] FDI and small business growth are the two critical elements in developing the private sector in lower-income economies and reducing poverty.

FDI AND DEVLOPING WORLD

FDI provides an inflow of foreign capital and funds, investment in addition to an increase in the transfer of skills, technology,

and job opportunities. Many of the Four Asian Tigers[->2] benefited from investment abroad. A recent meta-analysis of the effects of foreign direct investment on local firms in developing and transition countries suggest that foreign investment robustly increases local productivity growth. The Commitment to Development Index[->3] ranks the "development-friendliness" of rich country investment policies.

FDI IN INDIA

Starting from a baseline of less than $1 billion in 1990, a recent UNCTAD survey projected India as the second most important FDI destination (after China) for transnational corporations during 2010– 2012. As per the data, the sectors which attracted higher inflows were services, telecommunication, construction activities and computer software and hardware. Mauritius, Singapore, the US and the UK were among the leading sources of FDI.

IMPACT OF FDI IN INDIAN MULTI-BRAND RETAIL

FOREIGN INVESTORS TO ENSURE

At least 50%of total investment in ‘back-end’ infrastructure

Source at least 60% of farmer produce from small farmers having land holdings of less than 10 hectares.

Source 30% of other suppliers from SMEs anywhere in the world

The government will have the first right in the procurement of agriculture products.

SHARE OF ORGANISED COS IN|
TOTAL RETAIL||
||
JAPAN|66%|
||
MALAYSIA|55%|
||
INDONESIA|30%|
||
CHINA|20%|
||
INDIA|4%|
||

Huge investments in the retail sector will see gainful employment opportunities in agro-processing, sorting, logistics management and front-end retail. At least 10 million jobs will be created in the next three years in the retail sector.

FDI in retail will help farmers secure remunerative prices by eliminating exploitative middlemen. Foreign retail majors will ensure supply chain efficiencies.

Policy mandates a minimum investment of $100 million with at least half the amount to be invested in back-end infrastructure, including cold chains, refrigeration, transportation, packing, sorting and processing. This is expected to considerably reduce post-harvest losses.

This will have a salutary impact on food inflation from efficiencies in supply chain. This is also because

food, which perishes due to inadequate infrastructure, will not be wasted.

Sourcing of a minimum of 30% from Indian micro and small industry is...
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