Foreign Direct Investment In India Research Articles

Development and benefit of FDI in India

Foreign direct investment (FDI) is a key source of funds for India's economic development. Totake advantage of India's evolving economic climate and lower labour, foreign firms engage directly in fastgrowingprivate Indian enterprises. There are so many advantages of Foreign Direct Investments in Indialike Promotion of investment in key areas, New technologies, Increase in Capital inflow, Increase inExports, Promotion of Employment opportunities, Promotion of financial services, Exchange ratestability and development of backward areas. Foreign Direct Investment (FDI) is critical to a country'seconomic development. The entry of foreign cash has allowed India to improve its infrastructure,increase productivity, and increase employment. FDI also serves as a vehicle for acquiring sophisticatedtechnology and mobilizing foreign exchange reserves. This Article is an attempt to explore new benefitsof FDI for the economic growth of the nation.

General characteristics of investment law in India

The aim of the work is a comprehensive analysis of investment law in India. The methodological basis of the study are official websites of specialized institutions, laws, analytical reports, articles by other scientists, etc. According to the results of the conducted research, it was found that two main legislative acts regulate investment activities in India. The first piece of legislation is the Foreign Exchange Management Act, 1999, the main objective of which is to promote foreign trade and foreign exchange and to develop and maintain the foreign exchange market in India. According to Section 5 and 6 of the Law, operations with a current currency account are allowed only on the condition that they do not have any restrictions (criminal, state, etc.). Capital account transactions mean transactions during which changes in assets or liabilities occur (referring to liabilities of resident and non-resident persons in relation to assets). The second act – Consolidated Policy on Attracting FDI in India by the Department of Trade and Industry Promotion 2020 – includes clarification of all investment norms. The policy update is in line with the policy of need to attract FDI to India, as per the plans of the Department. In conclusion, it was found that the legal system of India is based on common law, which is based on English law. According to the Constitution of India, a quasi-federal structure has been approved, which provides for the division of legislative power between the central government and the individual states. Foreign direct investment in India is governed by two main pieces of legislation. The first is the Foreign Exchange Management Act of 1999, its main objective is to facilitate foreign trade and foreign exchange and to develop and maintain the Indian foreign exchange market. The second – Consolidated policy on attracting FDI to India. Attracting foreign direct investment in India is possible in two ways: automatic investment of FDI and obtaining permission for FDI.

“FDI AND ITS IMPACT IN INDIA”

A major factor in India's economic growth and development, foreign direct investment (FDI) is a game-changer. In this article, we take a look at how foreign direct investment (FDI) has affected different parts of India's economy and how it has affected things like job creation, technology transfer, and GDP growth. The paper explores the main factors that attract foreign direct investment (FDI) to India and the obstacles that stand in the way of this trend through an extensive analysis of previous research and empirical data. Keywords: Foreign Direct Investment, India, economic growth, employment, technology transfer

FDI in India: Analyzing Financial Flows and Economic Impacts

Foreign Direct Investment (FDI) plays a crucial role in shaping the economic landscape of India, attracting significant attention from investors, policymakers, and economists alike. As one of the fastest-growing economies in the world, India has been successful in improving its attractiveness to foreign investors through various policy reforms and liberalization measures. The study finds important patterns and connections in the dynamics of FDI inflow by applying quantitative analytical techniques such a regression analysis and correlation analysis. The results of regression analysis highlight the impact of the GDP on FDI inflow, showing a robust positive connection between GDP and FDI inflow. In recent years, there has been a substantial increase in FDI inflows into India across different sectors, such as telecommunications, manufacturing, and services. This surge in FDI can be attributed to the country's large and growing market, skilled workforce, improving infrastructure, and stable political environment. Analyzing the financial flows of FDI into India reveals that a significant portion of inflows comes from countries such as the United States, Singapore, and Mauritius. This diversification of funding sources indicates the global interest in investing in India and leveraging its potential as a key market in the region. The economic impacts of FDI in India are multifaceted and go beyond simply bringing capital into the country. FDI inflows contribute to job creation, technology transfer, skill development, and overall economic growth. Foreign investors bring in expertise, best practices, and access to new markets, which can benefit local industries and enhance competitiveness. Moreover, FDI inflows can also lead to improvements in productivity, efficiency, and innovation within domestic firms through spillover effects. However, it is essential to recognize the challenges associated with FDI in India, such as regulatory complexity, infrastructure bottlenecks, bureaucratic inefficiencies, and socio-political factors. Addressing these challenges requires continuous efforts from the government to further streamline regulations, improve infrastructure, enhance the ease of doing business, and foster a more investor-friendly environment. Keywords: Foreign Direct Investment (FDI), Regression, Correlation, GDP, Telecommunications.

Does foreign direct investment cause economic growth in India? An econometric analysis

With the lack of finance, many developing nations are struggling for investment in several areas to generate an opportunity for sustainable livelihood, and Foreign Direct Investment (FDI) emerged as an engine of economic growth, especially in developing nations. It helps to strengthen the economy by mainly promoting capital inflow and technical improvement into the recipient economies. However, some literatures found economic growth, responsible for the inflow of FDI. Therefore, this paper attempts to examine the causal relationship between FDI and Economic Growth in India. By running the Granger causality test in VECM settings, this study found, GDP causes inflow of FDI in India.

Nexus between formal institutions and inward FDI in India: a nonlinear autoregressive distributive lag approach

PurposeThis study presents time-series data estimations on the association between the indicators of institutional environment and inward foreign direct investment (FDI) in India utilizing a comprehensive data set from 1996 to 2021.Design/methodology/approachThe study employs the nonlinear autoregressive distributive lag (NARDL) model. The asymmetric ARDL framework evaluates the existence of cointegration among the factors under study and highlights the underlying nonlinear effects that may exist in the long and short run.FindingsThe significance of coefficients of negative shock to “control of corruption” and positive shock to “rule of law” is greater when compared to “government effectiveness, regulatory quality, political stability/absence of violence.” The empirical outcomes suggest the positive influence of rule of law, political stability and government effectiveness on FDI inflows. A high “regulatory quality” is observed to deter foreign investment. The “voice and accountability” index and negative shocks to the “rule of law” are exhibited to have no substantial impact on the amount of FDI that the country receives.Originality/valueThis study empirically examines the institutional determinants of FDI in India for a comprehensive period of 1996–2021. The study's findings imply that quality of the institutional environment has a significant bearing on India's inward FDI.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0375

Role of Foreign Direct Investment in India’s Agribusiness

Role of Foreign Direct Investment in India’s Agribusiness

The Causal Interplay between Corruption and Foreign Direct Investment: Evidence from China and India

This paper uses cointegrated error-correction modeling to investigate the nature of Granger causality between corruption and foreign direct investment (FDI) in two rapidly emerging economic superpowers; namely, China and India. The results for China and India indicate that short-run Granger causality unidirectionally runs from FDI to corruption without feedback. These empirical findings (along with supporting theoretical arguments) dispute prior correlational-based studies which claim that corruption instigates changes in FDI. However, our results further support significant long-run causality running from corruption to FDI inflows, but only in India (not in China). This finding reinforces theoretical propositions of lower corruption arbitrariness in China as compared to India. Furthermore, short- and long-run causality between corruption and FDI in India appear dynamic in nature and time-sensitive implying some difficulties for policymakers in their fight against corruption. The paper discusses possible underlying reasons for the empirical results and draws several policy and Asian business implications.

Dynamics of FDI Inflow on Indian Economy- A Brief Overview

In this article, the focus is on investigating the influence of foreign direct investment (FDI) on the economic growth of India following the economic reforms of 1991. Additionally, the challenges that India has encountered in positioning itself as an attractive destination for FDI in the global market are also analyzed. The study also investigates the year-wise and sector-wise flow of FDI between 2001 and 2021 to observe the dynamic patterns of FDI inflow in the country. Furthermore, the paper provides key policy implications and highlights the complexities surrounding FDI in India India has become a popular destination for foreign investors due to its market potential and liberalized policy regime, despite being a latecomer in the FDI scene compared to other East Asian countries. Since the economic reform of 1991, FDI in India has experienced a positive growth rate, with the government continuously focusing on liberalizing policies towards FDI. FDI has been a significant driver for India's economic growth, enabling the country to achieve financial strength, stability, growth and development to sustain and compete in the global economy. The study indicates that FDI growth effects vary across sectors, with the services sector promoting growth in the manufacturing sector through cross-sector spillovers. FDI is indeed indispensable considered for India's economic growth and a positive association exists between FDI and GDP.

Indian Entertainment Industry Analysis: Past, Present and Future

The entertainment industry is a component of the tertiary sector of the economy that includes the performing arts. When new technologies and concepts arise, the entire corporate world transforms. The industry is thriving financially and in terms of the talented artists and programmers it employs. Increased globalization and the subsequent elimination of market constraints resulted in astronomical growth. This research explores the origins, current conditions, hazards, potential solutions, future trends, and potential effects of foreign direct investment in India’s entertainment business. This research investigates the effects of globalization and its potential to provide new job possibilities. The data shown here has been gathered from secondary sources (the internet and published articles). The first form of entertainment was the transmission of cultural norms and beliefs from one generation to the next via the telling of stories. Since the arrival of the television triggered a seismic upheaval in the industry, distribution methods for entertainment have evolved gradually. While the epidemic has disproportionately affected certain areas of the industry’s workforce, others have been able to prosper because of the relative anonymity and safety of online venues. Television remains the most frequently consumed form of media, despite the advent of digital media and online gaming as more popular entertainment than film. As video streaming and other forms of online entertainment become popular, the OTT platform is anticipated to experience parabolic growth in the coming years. Due to the absence of references, the lack of emphasis on essential concerns, and the overall obsolescence of the accessible material, it was difficult to locate pertinent information. To support the nascent Indian entertainment industry and ensure the safety and stability of all its stakeholders, especially in challenging times like the ongoing pandemic, this paper highlights the significance of the government and regulatory bodies actively considering implementing incentive measures.

Determinants of Foreign Direct Investment in India and Retail Sector Liberalization: A GMM Estimation

Determinants of Foreign Direct Investment in India and Retail Sector Liberalization: A GMM Estimation

Regional Distribution of Foreign Direct Investment in India

The tremendous rise in Foreign Direct Investment (FDI) inflows following the economic reforms in 1991, has been one of the most prominent features shaping the behavior of the Indian economy in the past three decades. The present study is based on secondary data and the objective is to examine the trends in FDI inflows to India following the global financial crisis, for the period 2009-2010 to 2021-2022. Additionally, the distributional pattern of FDI among the regions and states of India is also analyzed, using the data for 30 states/territories. The results reveal that total FDI inflows have increased in substantial amounts over the period from US$ 37,745 million in 2009-2010 to US$ 84,835 million in 2021-2022. Maharashtra and Karnataka have surpassed all other states in FDI equity inflows over the period from October 2019 to September 2022. These two states have commanded 50 percent of the total FDI, whereas the regions in central, eastern, and northeast India have received less than 3 percent of the total FDI equity inflows. Thus, the regional disparities in the distribution of FDI are quite visible post-analysis. It is suggested that government should focus on making investor-friendly policies to tap the potential of regions neglected by foreign investors.

Foreign Direct Investment in India and Other Major Emerging Market Economies: A Panel Data Analysis

Foreign Direct Investment in India and Other Major Emerging Market Economies: A Panel Data Analysis

The determinants of inward FDI in India in the 2000s

Purpose Unlike the traditional growth model of emerging markets after economic liberalization, India’s inward foreign direct investment (FDI) surged paralleling its strong economic growth in the 2000s, despite the failure to establish a strong secondary sector. This creates an opportunity to deepen the conceptual and contextual understanding of the pivotal mechanisms that impel foreign multinational enterprises to invest into India and provides a natural setting to better understand the nature of its institutional, political and economic environment. Design/methodology/approach The authors develop a theory contextualized to Indian inward FDI patterns for the 2000–2017 period. The theoretical framework expands upon received investment motives, with explicit consideration given to the idiosyncrasies of developments in India’s recent macro and socioeconomic environment. The authors test the hypotheses using panel data from 134 countries that invested in India, using a Hausman–Taylor estimation. Findings The authors find that India’s transition toward a knowledge economy attracts asset augmenting rather than asset exploiting FDI. Investors appear to target long-term investments by gaining access to India’s digital capabilities, R&D, and growing talent base with a high degree of specialization within analytics, biotechnology, engineering, or pharmaceuticals. Foreign investors do not seem to be notably deterred by infrastructural challenges nor by legal and regulatory restrictions. Originality/value By providing a new perspective on India’s atheoretical economic development and FDI environment, this study offers a distinct point of comparison with regard to established hypotheses within the extant literature on FDI into emerging markets. Rethinking contemporary investment motive theory by introducing an adapted conceptual framework provides further opportunity to inform the understanding of firm strategies in similar environments.

Impact of Foreign Direct Investment on Indian Economy

Foreign direct investment (FDI) is an instrument for economic growth; it strengthens domestic capital, productivity and employment. FDI in India has got an important role in the development of the Indian economy. FDI in India has enabled India to achieve a certain degree of financial stability, growth and development in various ways. It has allowed India to focus on the areas that needed a boost and economic attention, and to address the various problems that continue to challenge the country. India has worked a lot to attract FDI from the world’s major investors. FDI is vital in the up gradation of technology, skills and managerial capabilities in various sectors of the economy. With globalization, developing countries, particularly those in Asia, have been witnessing an immense surge of FDI inflows during the past two decades. India with its considerable market potential and a liberalized policy regime has sustained its attraction for foreign investors. This research paper aims to observe the impact of FDI on Indian economy, predominantly after two decades of economic reforms. The paper provides the major policy implications from this analysis. The attraction of foreign direct investments (FDI) is often emphasised as a precondition for a successful economy by most governments of less developed countries. The objective of the paper is to evaluate economic impacts of FDI

Cross Border Insolvency: A Pearl in the Ocean

International Insolvency can also be termed as Cross Border Insolvency, when the debtor having assets or liabilities in more than one jurisdiction. International insolvency sometimes termed as Cross-Border insolvency was in practice since early stages in England and it was governed by the common Law of England. The Solomon v. Rosswas the first case recorded in 1764, in this case English creditor brought action in England against the sum owing to the Dutch firm which was declared as bankrupt in Netherlands. The historical development of Cross-Border insolvency can be traced back since modern Private International Law’s birth, when state use to enter into agreements and sign treaties, to harmonize their relationship and to resolve their conflicts. The treaty of Montevideowas signed by five countries in 1889 to harmonize their fiscal policies, was the first to recognise Cross-border Insolvency. Due to the Advent of globalisation, The insolvency Law Committee was formed for drafting the bill of Insolvency and Bankruptcy bill and it Included 2 provisions for dealing with the Cross Border Insolvency issues and the increasing foreign direct investment in India, there is a strong need of increasing incorporation of company in various jurisdictions and there is an urgent need for Law on Cross Border Insolvency for solving the disputes across jurisdictions

Analysis of India’s Non-State-Owned Enterprise Investments in Africa: An Empirical Approach

This paper focuses on Indian foreign direct investment (FDI) flows to Africa for the period 2008 to 2018, amidst increasing state efforts to improve Indo- African economic ties. This study pioneers the segregation of investments led by state-owned enterprises (SOEs) from non-SOEs in an empirical analysis. The motivation is rooted in the scarcity of empirical evidence of Indian FDI in Africa, particularly by non-SOEs. The random effects model was applied on the panel data for 2008-18 to highlight the significant causative effect of country alliances, gross domestic product (GDP) and net overseas development assistance of host countries in attracting greater FDI from Indian enterprises. The effect of corruption levels remains less clear in a statistical sense. These results could inform the political and economic policies of African host countries that seek financial and technical support from India.

SCENARIO OF FOREIGN DIRECT INVESTMENT IN INDIA DURING COVID-19

Foreign Direct Investment (FDI) is cited as one of the most strategic tools for a developing economy as it brings in market discipline by increasing competition. In addition, there is a growing demand for products and services that are available across the world. Due to India’s increasing working population with higher purchasing power there is an increasing demand for products and services that are best in class. The covid-19 pandemic has set the international financial system into a downturn which means the global economy has begun shrinking whereas India has no exemption. Nowadays India has emerged as one of the most preferred destination for FDI. The covid-19 pandemic has put international investor confidence in India to the test. The basic aim of the study is to examine the effect of Covid-19 in Foreign Direct Investment in India. The trends of FDI inflows have been monitored to compare pre and post Covid-19 period. The results reveal in 2020 has worst effect, while after that, due the revised FDI policy and India’s internal capability to attract international investors, increase in FDI inflows have been observed. FDI is considered as a positive factor of the economic expansion could play a key part in assisting the economy in the time of crisis. KEYWORDS: Foreign Direct Investment, Covid-19 pandemic

Determining the influence of LPI, GCI and IR on FDI: A study on the Asia and Pacific Region.

This study examines the impact of the Logistics Performance Index (LPI), Global Competitiveness Index (GCI) and Interest Rates (IR) on Foreign Direct Investment (FDI) for the Asia & Pacific region. The study is original as extensive evidence on the impact of LPI, GCI and IR on FDI in the Asia & Pacific region are examined initially. For the years 2007, 2010, 2012, 2014, 2016 and 2018, data was gathered for 33 nations in the Asia and Pacific area. Data analysis was performed using a panel regression model and multiple linear regression. The findings of the study reveal that LPI, GCI and IR are the three major factors influencing FDI inflows into the economies. However, the impact of these factors varies from country to country. The results concluded that LPI positively impacts FDI in India, Korea, Lebanon, and Oman. In contrast, a negative influence was observed for China, Kuwait and the Philippines. GCI positively impacts FDI in China, Korea, Kuwait, Pakistan and the Philippines, while a negative impact was observed in Armenia, India, Lebanon. Furthermore, IR has a positive impact on FDI flows in China and Egypt while in Korea and Lebanon, a negative impact was observed. Therefore, policymakers should focus more on improving the infrastructural requirements and macroeconomic factors while considering the other country-level variables that influence the FDI in flow.

Factors Affecting Foreign Direct Investment in India: A Survey Based Study of Economic Experts

The study can help identify the key factors that impact foreign direct investment (FDI) inflows into India. Political stability and a favourable regulatory environment are the most significant determinants of FDI inflows into India. Experts highlighted the importance of a stable political environment that fosters investor confidence and predictability. The liberalization of FDI policy has increased the sectors eligible for FDI and raised the FDI limit in various sectors. Similarly, ease of doing business measures such as digitization of procedures and streamlining of regulatory processes have improved the investment climate in the country. Overall, the study provides important insights into the factors that impact FDI inflows into India and offers suggestions for policymakers to further improve the investment climate in the country. The findings suggest that political stability, a favorable regulatory environment, better infrastructure, and flexible labor laws are crucial for attracting FDI into the country. Policymakers should continue to focus on these areas to attract greater FDI inflows into India and foster sustained economic growth. Sample of 130 respondents that includes economic experts were surveyed to know the factors that affects Foreign Direct Investment in India and it is found that Political stability, Favourable regulatory environment and better infrastructure the factors that affects Foreign Direct Investment in India.