1 INDIAS FOREIGN DIRECT INVESTMENT: CURRENT STATUS, ISSUES AND POLICY RECOMMENDATIONS

Abstract: Foreign Direct Investment (FDI) as an important driver of growth. It is an important source of non debt financial resources for country for economic development. Besides it is a means of achieving technical knowhow and employment generation of employment. However, many are of the view that FDI is a big threat to sovereignty of host and domestic business houses. Faster exploitation of natural resources for profit may deprive host from such resources in long run. Midst of debate on pros and cons of FDI, world economy has observed a phenomenal change in volume and pattern of FDI. There is clearly an intense global competition of FDI. India is not behind this global race of attracting foreign investment. India emerged as an attractive FDI destination in services but has failed to evolve a manufacturing hub which has greater economic benefit. FDI though one of the important sources of financing the economic development, but not is not a solution for poverty eradication, unemployment and other economic ills. India needs a massive investment to achieve the goals of vision 20-20. Policy makers need to ensure transparency and consistency in policy making along with comprehensive long term development strategy. Key words: Foreign Direct Investment (FDI), analysis of investments in India, flow of FDI, policy recommendation.

2 Foreign Direct Investment in China and India: Development Experiences and Determinants in a Comparative Perspective
ABSTRACT The analogies between Chinese and Indian economies draw obvious comparison. This research seeks to understand the FDI inflows and examines the main determinants in the two countries. Since the empirical work over the past decades has not produced consensus as to the determinants of FDI, Dunnings O-L-I paradigm offers a unified framework of the various theories. To identify the differences of determinants of FDI inflows in China and India, the changing patterns of FDI are closely studied with special reference to the source countries of FDI, the sectoral composition and regional distribution. Moreover, this study develops a PESTEL framework for analyzing the recent experiences and determinants of FDI inflows in China and India. It concludes that on the determinants of political and FDI policies, economic development, society and business environment, China does better than India; whilst India is ahead of China in terms of technology and legal system.

3 FDI Outflows from India: An Examination of the Underlying Economics, Policies and their Impacts
Abstract This paper discusses the trends in India's outward FDI over the last decade and then attempts to identify the driving factors for the same. The aim is to provide policy makers with insights regarding levers which would help in encouraging FDI outflows and to stimulate further research in foreign investment from emerging economies. The analysis is based on 287 instances of foreign investment from India by top Indian companies across 17 sectors. The paper draws on the "eclectic" paradigm to study the impact of ownership, location and internalization variables on India's foreign investment. A sector wise analysis of mode of entry, intent of entry and geographic concentration has been performed. At an aggregate level, it has been found that

acquisitions have been the predominant mode of entry for Indian firms investing abroad and seeking new markets the primary intent of investment. A regression model was also developed to understand the impact and relative importance of ownership variables such as distribution system, need for resources, factor of production, post sales service requirement, presence of IP and brand on foreign investment from India. It was found that high distribution expenses and need for resources had a very positive influence on foreign investment. The paper also discusses the key policy changes that impacted outward FDI from India in the last decade and relationship of outward FDI with other macroeconomic indicators such as GDP and Fischer Open Differential.

4 FDI in BRICs: A Sector Level Analysis

Abstract This paper attempts to compare the overall trends and industrial patterns of inward foreign direct investment in the BRICs and explain their determinants. The overall trend of the inward FDI in the BRICs is increasing. Nevertheless, the industrial patterns of inward FDI are different from each other. In addition, there are three main factors that determinant the industrial patterns of inward foreign direct investment in the BRICs: develop courses, resources and the business environment. Keywords: Inward FDI, BRICs, Industrial pattern

5 COMPARATIVE ANALYSIS OF FDI IN CHINA AND INDIA

Abstract Some emerging markets have been leaders in the world and have grown at a higher rate benefiting from higher Foreign Direct Investments (FDI) by Trans National Corporations (TNCs) and some have been laggards and have not able to attract as much FDI and grow that efficiently. Why China gets 60 billion dollars FDI annually as compared to India that does not even get 6 billion dollars is an intriguing question? This dissertation explores the determinants of FDI in such emerging economies to answer the above question. What has India done till now to attract FDI? What has been Chinas strategy to become the most FDI attracting country in the world? What lessons India can learn from China and improve its FDI inflow? The study attempts to theorize what lessons emerging markets that are laggards in attracting FDI, such as India, can learn from leader countries in attracting FDI, such as China in the global economy. This study fills the gap in the literature by analyzing the Indian data at the relevant micro state level for the period 1992-2005 and comparing it with the Chinese data for period of 1978-2005 at the relevant economic zone level. Indian FDI attraction model was tested using OLS and autoregressive models and it was found that India has grown due to its human capital, size of the market, rate of growth of the market, and political stability. For China, congenial business climate factors comprising of making structural changes, creating strategic infrastructure at SEZs, and taking strategic policy initiatives of providing economic freedom, opening up its economy, attracting diaspora, and creating flexible labor laws were identified as drivers for attracting FDI. The model using these variables was tested with OLS regression and autoregressive regression analysis and was found significant. There are lessons that India can learn from China. Emulating and replicating successful infrastructural stories such as DMRC, DVP, and Golden Quadrilateral will help develop infrastructure. Structural Shift in terms of moving idling labor in agriculture to skill-neutral mass manufacturing will employ millions

from seven-up BIMAOR UT UP CHA JA (sick get up and conquer) states, instead of current trend of just developing the service sector core competence only. Few but large world class SEZs in seven-up states on the east coast will help leverage demographic realities. Privatizing oil sector and banks to reduce government intervention and provide economic freedom, opening economy to level playing field to TNCs by reduced tariff and taxes, proactively engaging diaspora, and flexible labor laws to permit free entry and exit to TNCs will help India attract higher FDI. This study might help countries such as PIN (Pakistan, Indonesia, and Nigeria) which will follow the BRIC economies in growth, want to grow, to broaden their understanding and formulate policies to attract FDI. At the enterprise level, it might help TNCs in understanding markets and formulating entry and growth strategies in these markets.

6 Role of FDI in Economic Development of India: Sectoral Analysis

FDI plays an important role in the development process of a country. It has potential for making a contribution to the development through the transfer of financial resources, technology and innovative and improved management techniques along with raising productivity. Developing countries like India need substantial foreign inflows to achieve the required investment to accelerate economic growth and development. It can act as a catalyst for domestic industrial development. Further, it helps in speeding up economic activity and brings with it other scarce productive factors such as technical knowhow and managerial experience, which are equally essential or economic development

7 Economic factors and Foreign Direct Investment in India: A correlation study

ABSTRACT Foreign Direct Investment in the past years has generated a lot of euphoria. It is said that strong fundamentals of the economy aided by liberalized government policy has led to the boom of FDI inflow in India. This paper highlights the vital economic determinants of FDI inflow in India and there significant correlation with the actual FDI inflows. The paper also examines the sector wise trend in Foreign Direct Investment (FDI) inflow into India during post liberalization period and the recent trend of India as a falling destination for FDI. The time period for the purpose of study ranges from 1991 to 2009 limiting to the top 10 sectors of Indian economy. It is strongly believed in the analysis that FDI inflow over the decades has shown a very unsteady and fluctuating trend in various sectors of the Indian economy. FDI inflow in India is found to be highly correlated with the economic factors taken into consideration and it is in Indias interest to continue to boost foreign investment by liberalizing rules on equity caps, investment reviews and other provisions that have impeded Indias ability to attract even more foreign investment over the recent years. Keywords: Foreign Direct Investment, Sector wise Analysis, Economic Determinants, Coefficient of Correlation (r).

8 Emerging multinationals: outward FDI from the BRICS countries

Abstract: Outward foreign direct investment from emerging and developing economies has undergone important quantitative and qualitative changes over the last decade. This paper takes stock of the mounting outward investment flows with special focus on

China, India, Brazil, Russia, and South Africa ('BRICS'). Following a brief discussion of FDI and emerging economies in general it is suggested that the current increase in outward investment from emerging and developing economies may constitute a third 'wave', distinct from the two previous waves depicted in the literature. The contours of such a wave are outlined, followed by an empirical analysis of outward investment from the BRICS countries. Keywords: foreign direct investment; outward FDI; BRICS; BRIC; multinational enterprises; MNEs; transnational corporations; TNCs; emerging economies; China; India; Brazil; Russia; South Africa; outward investment.

9 Capability development and the geographic destination of outbound FDI by developing country firms
Abstract: This paper uses UNCTAD data to relate the destination of FDI from developing countries to their capability development. It expands the Investment Development Path (IDP) and the flying geese model to include the destination of outward FDI. Investments from developing into developed countries are predominantly in low and medium research-intensive (often considered 'sunset') industries where investors have established strengths in their home base. Developing countries play an active role in knowledge-intensive services in especially the developing world. Even though the developing-country knowledge-intensive firms are not global leaders, their intraregional FDI enables capability development in emerging industries. Keywords: outward FDI; developed countries; developing countries; low research intensity; knowledge-intensive services; investment development path; IDP; flying geese model; foreign direct investment; capability development; geographic destination; outward investment; sunset industries.

10 The evolution of Indian Outward Foreign Direct Investment: changing trends and patterns
Abstract: This paper provides an overview of the changing patterns of Outward Foreign Direct Investment (OFDI) from India over 19752001. It shows that the increasing number of Indian Transnational Corporations (ITNCs) during 1990s has been accompanied by a number of changes in the character of such investment which, notably include overwhelming tendency of Indian outward investors to have full or majority ownership, expansion into new industries and service sector, and the emergence of developed country as an important host region for trans-border activity. The competitive advantages of Indian OFDI are now being increasingly driven by technological and skill activities. Keywords: India; outward FDI; OFDI policy; foreign direct investment; transnational corporations; TNCs; outward investment.

11 Foreign Direct Investment and IT Industry in India Abstract

Foreign Direct Investment (FDI) plays a vital role in the development of not only the developing country but also to developed and newly industrialized countries (NICs). As every developing country in the world recognizes the importance of FDI to its economic development, laws, regulations and rules are being imposed or modified to harvest bilateral benefits from FDI. In this study, theoretical knowledge

and practicalities of FDI in India in comparison with the other countries are studied. In addition, the contribution of Information Technology (IT) industry to the Economy of India is investigated. Finally, observation and suggestions are launched based on the investigation and findings in the study. Key-words: IT, Development, FDI

12 Foreign direct investment in airlines: does telecommunication provide a solution?

Abstract The field of international air transport is one of complex regulation. When it comes to foreign direct investment (FDI) in this area regulators have long sought to protect the industry from outside control and ownership. Recently, however, a more liberal attitude is emerging towards FDI as one which embraces this source of capital. The questions that this dissertation will try to answer are why FDI in air transport is still so strictly controlled in air transport and how it could be regulated in the future. FDI in basic telecommunications has experienced the same development as international air transport. As in aviation, basic telecommunications providers have been prevented from acquiring excessive foreign controlling capital. This year, however, basic telecommunications was brought under the General Agreement on Trade and Services (GATS). This has resulted in a decrease in the regulatory restraints against FDI. It is the contention of this dissertation that as in international basic telecommunications, FDI in international air transport should be regulated through the GATS. The paper examines the history of FDI regulation in both fields as well as recent trends to liberalize FDI flow. It concludes with a proposed GATS annex for air transport based on the lessons learned from basic telecommunications.

13 FDI IN THE INDIAN RETAIL SECTOR- PROBLEMS AND PROSPECTS

ABSTRACT

The retail industry in India is of late often being hailed as one of the sunrise sectors in the economy. AT Kearney, the well-known international management consultancy, identified India as one of the most attractive retail destinations globally from among thirty emergent markets in 2010. The government has allowed FDI in the single brand segment upto 51% and has also allowed 100% FDI in the wholesale segment. However, as of now, FDI in the multi brand segment wherein foreign giant retailers like Wal-Mart operate are not allowed to enter India. This is because the government wanted to ensure that the entry of global retail giants does not displace the existing population of millions of people employed in the local retail business. The retail sector in India is largely dominated by the unorganized players (mom and pop stores/ kirana or neighbourhood stores with 100- 500 square feet floor area). Organised sector forms just 5% of the market. The retail sector in India is under- invested and according to a study by McKinsey, almost Rs 50,000 crores worth of food is wasted because of poor supply chain management. These drawbacks can be removed if the modern foreign retailers are allowed to enter the Indian markets as they shall bring their technical knowhow and help in cutting prices by removing intermediaries from the supply chain. The paper discusses the problems and benefits of allowing FDI in the Indian retail sector and recommends how it may be gradually introduced when inevitably it must. KEYWORDS FDI, Retail, Organised Retail, Wal-Mart

14 Sectorwise analysis FDI inflow in India

ABSTRACT The Sectorwise Analysis of FDI Inflow in India reveals that maximum FDI has taken place in the service sector including the telecommunication, information technology, travel and many others. The service sector is followed by the manufacturing sector in terms of FDI. High volumes of FDI take place in electronics and hardware, automobiles, pharmaceuticals, cement, metallurgical and other manufacturing industries.

15 Trends in foreign direct investment flows: a theoretical and empirical analysis

Abstract

This paper seeks to provide a rationale for changing trends in the flow and determinants of foreign direct investment (FDI) as a result of macro-economic and firm strategy considerations. We identify several factors that impact on such trends, and develop propositions that could explain the phenomenon generically. The study then provides preliminary empirical support for the propositions presented, and outlines the path for further research needed to investigate more causal links. The statistical analysis of investments by US multinational enterprises (MNEs) reveals significant changes in the regional distribution of FDI, and a change in some of its traditional determinants. Results show that US MNEs are now making increasing investments into Asia to exploit low wage levels and to secure entry into new markets.

16 AN OVERVIEW OF FOREIGN DIRECT INVESTMENT IN INDIA

ABSTRACT This paper attempted to make an analysis of FDI in India and its impact on growth. It also focuses on the determinants and needs of FDI, year-wise analysis, sectoral analysis and sources of FDI and reasons. One of the economic aspects of globalization is the fact that increasing investments in the form of foreign direct investments. In the recent times due to the global recession most of the countries have not been able to pull investments. India has been able to attract better FDIs than the developed countries even during the crisis period also. Especially in the recent years the FDI in India has been following a positive growth rate. Since 1991 the government has focused on liberalization of policies to welcome foreign direct investments. These investments have been a key driver for accelerating the economic growth through technology transfer, employment generation, and improved access to managerial expertise, global capital, product markets and distribution network. FDI in India has enabled to achieve a certain degree of financial stability; growth and development to sustain and compete in the global economy. KEYWORDS: FDI, GDP, Growth & Development & Indian Economy.

17 Sectoral Analysis of FDI Inflows in India

Foreign Direct Investment (FDI) is considered to be the lifeblood of economic development especially for the developing and underdeveloped countries .FDI is a tool for jump-starting economic growth through its strengthening of domestic capital, productivity and employment through the up gradation of technology, skills and managerial capabilities in various sectors of the economy. The present paper attempts to analyze significance of the FDI Inflows in various Indian sectors from 2005- 2010. The Sector-wise Analysis of FDI Inflow in India reveals that maximum FDI has taken place in the service sector including the telecommunication, information technology, travel and many others. The service sector is followed by the manufacturing sector in terms of FDI. Keywords: - FDI, domestic capital, productivity, employment, economy, sectors.

18 IMPACT OF FOREIGN DIRECT INVESTMENT ON INDIAS AUTOMOBILE SECTOR-WITH REFERENCE TO PASSENGER CAR SEGMENT
Abstract FDI Inflows to Automobile Industry have been at an increasing rate as India has witnessed a major economic liberalization over the years in terms of various industries. The automobile sector in India is growing by 18 percent per year. The basic advantages provided by India in the automobile sector include, advanced technology, cost-effectiveness, and efficient manpower. Besides, India has a well-developed and competent Auto Ancillary Industry along with automobile testing and R&D centers. The automobile sector in India ranks third in manufacturing three wheelers and second in manufacturing of two wheelers. The major investing countries are Mauritius (mainly routed from developed countries), USA, Japan, UK, Germany, the Netherlands and South Korea. 24. India needs to worry on the foreign direct investment (FDI) front. According to the statistics released by Indias Ministry of Commerce and Industry, the country has received only $18.35 billion in FDI in the first 11 months (April-February) of the financial year 2010-2011, compared to $63 billion that came in the 11 months of the previous financial year. Future prospect of Indian Automotive Sector is looking bright. Indigenous automobile companies are replacing foreign multinational companies in terms of consumer satisfaction. Since 2002, automotive sector has much to deliver in the years to come. Direct Investment Inflows in India-Opportunities and Benefits, Important Aspects of FDI in Automobile Industry, Recent FDI Trends in India, The major foreign players who have a significant role in the development of Indian automobile industry, were discussed and the passenger car segment growth, Production, sales and Investment were analyzed.. Here the researcher using three statistical tools for analyzing the study, ARIMA, Linear & Compound Model for analysis purpose to measure future prediction using time series analysis. Hence this study necessitated the causes and impact of FDI flows in automobiles sector and also policy regulation, FDI flows in passenger car segment and recent FDI trend in this sector were discussed. Key words: FDI inflows, automobile sector, passenger car and policy regulation.

19 INPUT OUTPUT MODELING OF IMPACT OF FDI ON INDIAN ECONOMIC GROWTH*

Capital/ investment and human resources are the pivots of development. Short supplies of domestic capital limit the growth of developing countries. Low GDP keeps savings and investment rates low which, in turn, limit growth. Low technological base of production is another factor impinging upon growth of developing countries. FDI mitigates these constraints to growth to some extent. FDI brings capital with foreign technology and modern managerial techniques and organizational structures (Prakash and Balakrishnan, 2005). Besides, FDI and growth, like several other variables, are bi-directionally related. Thus, FDI has both in and out flows, since developing economies like Korea, China and India are also the suppliers of FDI. Foreign Investment Outflows (FIO) depends basically on supply of capital in the home country. Developed rather than developing countries may, therefore, be hypothesized to be the main suppliers of FDI, and hence, FIO. As against this, countries of the third world could be envisaged to be the net recipients of FDI, howsoever high their growth rate and development status may be. Actual outflows of FDI are partly governed by demand in the recipient countries and partly by supply in home countries of FDI. We postulate that market size, as manifested by population and per capita income (Mathur, 1979), economic environment including macro policy, specially reforms, current growth rate(s) and future growth potential decisively affect quantum and sectoral composition of FDI in an economy. 20ROLE OF FDI IN INFRASTRUCTURE DEVELOPMENT IN INDIA
ABSTRACT

Inflow of Foreign Direct Investment (FDI) in the infrastructure sector has brought about a host of changes in the economy, including putting an end to a large number of government regulations and has given birth to innovative schemes of financing infrastructure projects. India is now the third most favoured destination for FDI, behind China and USA. In fact, UNCTAD has said that India is one among the dominant host countries for FDI in the Asia-Pacific region. Times have been really changing as far as this theme of foreign participation is concerned. However, all said and done, unless there are clear policy instructions with respect to the prioritizing of infrastructure projects and reform of the supportive institutional framework (basically the law and judiciary), invitation to any kind of capital, especially the one from foreign sources, will of no use. In this view, this paper endeavours to give an overview about the infrastructure development in India since the inception of the first five year plan. The paper in essence focuses on the role of FDI in the infrastructure development in India especially since the Liberalisation, Privatization and Globalization era. It also seeks to highlight the sectors in which FDI investments have taken place over the past decades and the changing pattern of FDI investments with respect to the sectors in which the investments are made. The study is broadly based on secondary data and the paper has its significance to the academicians, industrialists as well as to the policy makers. KEYWORDS Foreign Direct Investment, Five Year Plan, Infrastructure Development.