Mcom ppt 1

SR. NO NAME OF THE STUDENT TOPIC TO BE COVERED ROLL NO

1. FRAZER TAYLOR FOREIGN INVESTMENT, AUTHORITIES

DEALING IN FI AND FDI.

54

2. SONALI SATARKAR SECTORS WHICH ARE ALLOWED AND NOT

ALLOWED FOR FDI , FACTORS AFFECTING

FDI.

48

3. NIKITA BHAGAT FII, CATEGORIES AND FACTORS

AFFECTING FII.

02

4. FAIRY FERNANDES SWOT ANALYSIS OF FII 14

5. VEENA VARGAOKAR IMPACTS OF FI AND INDIA AS A

DESTINATION FOR FI.

55

MEANING OF FOREIGN INVESTMENT

• Foreign Investment is nothing, but the flow of

capital from one nation to another.

• Foreigners somewhat play an active role...

• E.g. General Motors Co.

• Generally, Countries often rely on foreign

investment…

CLASSIFICATION OF FOREIGN INVESTMENT

FOREIGN INVESTMENT

1) FOREIGN DIRECT INVESTMENT

2) FOREIGN INSTITUTIONAL INVESTMENT

AUTHORITIES DEALING WITH FOREIGN INVESTMENTS

1) FIPB

2) FIIA

3) SIA

1) FIPB: Foreign Investment Promotion Board

• To promote foreign direct investment into India –

1) undertaking investment promotional..

2) facilitating investment in the country.

• The Board considers all investment proposals within 15 days.

• Decisions are communicated to the applicants within four

weeks.

2) FIIA: Foreign Investment Implementation Authority

• To facilitate quick translation of FDI approvals into

implementation.

• It provides a one stop service…

• And also helps them approach the Government agencies to

find solutions to problems

3) SIA: Secretariat for Industrial Assistance

• An investor friendly agency…

• "SIA Newsletter" and the "SIA Statistics“.

• Website address i.e. http://indmin.nic.in

• It acts as a gateway to industrial investment in India…

• Advisory services are also provided on-line through the

website, apart from information through meetings,

promotional events etc.

MEANING OF FDI

•When a foreign company invests in the capital of an Indian co…

•GDP EQ: Y=C+I+G+(X-M)

•The forms in which foreign companies undertake their business

in India are…

1. As a Joint Venture or a Wholly Owned Subsidiary..

2. Representative Office/Project Office or a Branch Office...

E.g.

FDI IN INDIA ARE APPROVED THROUGH TWO ROUTES:

1) AUTOMATIC ROUTE

•Do not require a prior approval…

•Provided the proposed foreign equity is within the specified

ceiling…

•Citizens or Entities incorporated in Pakistan and Bangladesh…

•E.g. Investments in high-priority industries or for trading

companies primarily engaged in exporting…

2) NON- AUTOMATIC ROUTE

•Government route.

•Has to get a prior approval…

•Includes activities not covered under A.R

•An application has to be made in Form FC-IL,

•Website: http://www.dipp.gov.in

VARIOUS SECTORS WHERE FDI IS ALLOWED.

1) AUTOMATIC ROUTE

• Insurance 26%

• Domestic airlines 49%

• Telecom service 74%

• Private sector banks 74%

• Mining of diamond

&precious stones 74%

• Exploration & mining of

coal & lignite 74%

VARIOUS SECTORS WHERE FDI IS ALLOWED.

2) NON-AUTOMATIC ROUTE

• Defense 26%

• FM broadcasting 20%

• News & current affair 26%

• Broadcasting-cable, up linking 49%

• Trading-wholesale cash & credit, export trading etc. 100%

• Tea plantation 100%

• Development of airports 100%

• Courier services 100%

SECTORS WHICH ARE ALLOWED 100 % FDI

• Engineering & Manufacturing sector

• Roads & Highways, port, & Harbor

• Industrial model towns/industrial parks

• Hotel & Tourism • Pollution control and management

• Advertising & Film industry

• Power generation (hydro-electric, coal, lignite/oil & gas)

• Information technology including E-Commerce

SECTORS WHERE FDI IS NOT PERMITTED

1• Arms & Ammunition

• Atomic Energy

2• Railway Transport

• Coal & Lignite

3• Mining of iron, manganese, chrome, gypsum

, sulphur , gold , diamond,copper, zinc

FACTORS AFFECTING FDI

• Size of market

• Political condition

• Macro economic environment

• Legal & Regulatory framework

• Access to Basic inputs

MEANING OF FII

VARIOUS SOURCES OF FII

• Banks

• Insurance Companies

• Pension Fund

• Hedge Fund

• Mutual Fund

• Asset Management Companies.

FACTORS AFFECTING FII

• Interest rate of the country

• Money supply and inflation rate

• Exchange rate of the country

• B.O.P

• Economic growth

SWOT ANALYSIS OF FII

STRENGHTS

1) Provides the most important resource i.e. is finance.

2) Contributes to the economic growth of the country.

3) Balances the balance of payment position.

4) Provides more returns than in domestic countries.

5) Develops relationship between two countries.

WEAKNESS

1)Focuses more on

developing countries.

2) Hampering the progress

due to anytime withdrawal.

3) Provides only short term

opportunities.

SWOT ANALYSIS OF FII

OPPORTUNITIES

1)Better infrastructure.

2) Exploitation of resources to

the maximum.

3) Better technology available.

THREATS

1)Anytime withdrawal of

investments.

2) Investments made in

Foreign countries poses threat

to the Indian companies.

3) Increased returns.

IMPACTS OF FOREIGN INVESTMENT ON OUR

ECONOMY

FDI

• Creates employment opportunity for domestic country.

• Good relation between two countries.

• Modern technology.

• Indian companies get a chance to work with the world market Leader Companies.

• Inflow of foreign funds in Indian economy, creating good capital market.

• To provides the goods and services at best suitable price.

• It creates the competition among the domestic company and MNC in this way domestic co can increase their efficiency.

IMPACTS OF FOREIGN INVESTMENT ON OUR

ECONOMY

FII

• FII leads to Appreciation of the currency

• FII affects exports

• FII affects the stock market

• FII and inflation

• Capital formation in domestic countries

• FII and local companies

INDIA AS A DESTINATION FOR FOREIGN

INVESTMENT

-40000

-20000

0

20000

40000

60000

80000

100000

120000

140000

160000

2008-09 2009-10 2010-11 2011-12

FDI(in crores)

FII( in crores)

FDI V/S FII FOR THE FINANCIAL YEARS (FROM

2008-09 TO 2011-12)

CONCLUSION

•FDI is expected to be long term whereas FII are seen as good

weather friends…

•FDI investments are more stable …

•E.g.

•Impact of FDI is more visible…