FDI Contribution to the Maritime Industry in India

Abstract

In today`s economy FDI (Foreign Direct Investment) is indispensable element for economic growth of rapidly developing countries like India. The FDI in addition to providing sources of technology and best practices from the developed nations also can helps the investing companies to take benefits of cheap wages, tax benefits and other facilities from the invested countries. With respect to the shipping and ports, India allows 100% FDI and also facilitates ten years tax free for companies which develop port or container terminal, maintenance and its operations. In fact Indian government has eased the FDI in port sector through automatic route in which a foreign company doesn`t require prior approval from the central government or RBI. The automatic route is in fact now allowable in sectors and business activities. The companies can invest in shipbuilding, ship repair, ship recycling etc. This paper explains the infrastructure and economic contributions of the ports and shipping before and after the introduction FDI in these sectors. The paper describes how the FDI impacted the technological growth in the local scenario, socio economic growth of the regions , industries alongside the ports like economic zones / free zones , popularity of Indian port infrastructures in the global shipping market which will attract bigger vessels and more port calls, transshipments etc.