Submitted by : Faiz Mahdi Syed
Submitted to :
Date : November 11, 2012
The role of Foreign Direct Investment (FDI) in the growth process has been a heated topic of debate in several countries including India. FDI is the main source of the globalization efforts of the world economy. Research shows that India has become the second most important destination for transnational corporations and the latest major frontier for globalized retail. The sectors include services, telecommunications, construction activities and computer software and hardware. In this report, we will find out about the pros and cons of opening up a FDI in India and how it will affect its economy, business and environment.
According to Ernst & Young, FDI in India in 2010 was US$ 44.8 billion and in 2011 it has experienced an increase of 13% to US$ 50.8 billion.
In supply chain sector, the government has approved 100% FDI for developing cold chains. This allows non-Indians to now invest with full ownership in demand for efficient food supply system. At present, India does not allow FDI in multi-brand retail but permits up to 51% in single brand retail in 2006 and 100% in cash and carry whole sale trading.
Opening up FDI in a country has its pros and cons and the government goes through substantial amount of time in deciding whether to open up its market. People have shown mixed-feelings about this and it is feared that by opening up markets to competition and foreign investment without restriction, they will lose control of their strategic industries and influence on national security, social stability and economic development. Research also shows that the majority of people have shown that they are for the opening of FDI in their country.
The investors also weigh out the setbacks when thinking of investing in a country. They have to consider political issues like the government...
Please join StudyMode to read the full document