Abstract
The Foreign Direct Investment (FDI) environment in India has undergone a drastic change since the economic reforms in 1991. The positive changes can be particularly attributed to the evolving policy framework. The main thrust of the financial sector reforms has been the creation of efficient and stable financial institutions and development of the markets, especially the money and government securities market. Indian banks going global and many global banks setting up shops in India, the Indian banking system is set to involve into a totally new level it will help the banking system grow in strength going into the future. India offers attractive investment opportunities for foreign companies and has adopted a number of policies to attract foreign direct investment into the country and the country seems to offer perhaps one of the most liberal FDI regimes in Asia. It’s even reviewed that the investment climate has not improved in India as a result of lack of good governance, corruption, political instability and disturbance, bureaucratic inertia, and poor law and order situation. Indian government incentives to foreign investors, particularly Special Economic Zones, the Indian regulatory environment as it affects investment, and the effect of India’s global, regional, and bilateral trade agreements on investment from the United States and other countries.
Highlights
Today India is one of the most stirring and promising markets in the globe
Using World Bank survey data, we find that foreign-invested enterprises’ (FIE) in India perceive more obstacles to business operations and development relative to domestic firms, especially on issues related to government regulations and legal institutions [5]
The results suggest that there is no co-integration between Foreign Direct Investment (FDI) and Gross Domestic Product (GDP) in the both long and short run in Bangladesh and India
Summary
Today India is one of the most stirring and promising markets in the globe. Technical and Skilled human resources are the finest available in the world. According to new economic policy foreign investments were greatly essential for India to become regularly competent in International trade [1] This new policy removed all unnecessary rules and given liberal environment to foreign investors for FDI inflows under automatic route. The objective was to facilitate non‐ debt creating foreign capital inflows and to develop the stock market in India, lower the cost of capital for Indian enterprises and indirectly improve corporate governance structures. On their part, large Indian companies have been allowed to raise capital directly from international capital markets through commercial borrowings and depository receipts having underlying Indian equity. An Indian company may receive Foreign Direct Investment under the two routes as given under: Receved September 01, 2014; Accepted January 26, 2015; Published February 12, 2015
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