Foreign Direct Investment In India Research Articles

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.

Foreign Direct Investment in India’s Retail Bazaar: Opportunities and Challenges

Foreign Direct Investment in India’s Retail Bazaar: Opportunities and Challenges

ASSOCIATION OF ELECTRICITY CONSUMPTION, ECONOMIC GROWTH AND FDI IN INDIA

India is one of the largest producer and consumer of electricity in the world owing to being one of the most populous country in the world signifying the demand for electricity is only set to grow further. World has witnessed an era of economic growth aided pertinently by electricity consumption and growing demand. With FDI indorsed downright to this vital utilities sector, it becomes imperative to cognize the relationship of Electricity Consumption, Economic Growth and FDI in India. In this study we investigate the causal direction of relationship among Foreign Direct Investment, Electricity Consumption and Economic Growth in India by using time-series data for the period 1986–2021 and employing econometric models. We find two uni-directional causalities running from Electricity Consumption to Economic Growth and Economic Growth to FDI and a bi-directional causality between Electricity Consumption and FDI. The results of the study provide a novel perspective for policy makers while formulating policies related to the power sector and foreign direct investments in India. The focus of Policy makers should be on enabling electricity service providers to offer best services to commercial and non-commercial participants as it aids in Economic growth of the country. For enhanced economic growth a country like India must have good and world-class infrastructure, efficient and effective regulatory mechanism equitable for all stakeholders, an improved living standard for people of all economic strata and a stable, healthy business friendly environment coupled with policy stability through stable government.

Disentangling the Nexus Between Exchange Rate Volatility, Exports, and FDI: Empirical Evidence from the Indian Economy

The primary objective of the study was to scrutinize the effect of exchange rate volatility on foreign direct investment (FDI) inflows and Indian exports during the flexible exchange rate period. The bounds testing procedure confirmed the presence of a single (stable) long-run relationship between exports, conditional exchange rate volatility, and unconditional exchange rate volatility. The autoregressive distributed lag model verified that volatility in Indian rupee vis-à-vis USD had a significant (negative) impact on Indian exports and FDI inflows. Besides, trade openness and gross domestic product, in the long run, were positive and significant in explaining the exports and FDI inflows. Based on the empirical results, India should devise suitable macroeconomic policies to reduce exchange rate volatility to make the export-led growth strategy a success. Moreover, emerging and progressive economies like India should strengthen and streamline their domestic foreign exchange markets without compromising the level of trade openness. More precisely, the forward exchange markets’ coverage should be broadened, as they provide protection (hedging) against the exchange rate volatility in the long run.

Impact of trade openness and inflation on FDI in India: ARDL Approach

Foreign Direct Investment (FDI) and trade are commonly considered as important economic indicators. In this globalised era, FDIs is among the best medium to bring the external finance into the country. This study explores the influence of inflation and trade openness on FDI in India during the period 1980-2020 using the time series methods. For this research study, Foreign Direct Investment (FDI) is the dependent variable, whereas Inflation and Trade Openness are independent variables for investigating the causal and long-run relationship among the variables taken in India. In order to fulfil the aforementioned objective, Auto Regressive Distributed Lag (ARDL) Bounds test approach has been used. The findings imply that FDI inflows and trade openness have a long-term association. Further, it has also been found that trade openness shows a positive statistically significant impact on foreign direct investment, indicating that higher openness, will attract greater level of FDI in the country (India). Although trade openness and inflation are both positively associated with FDI inflows, inflation is statistically insignificant.

Foreign Direct Investment in India: A Trends Analysis

Foreign capital plays an important role in the development of developing countries whose domestic capital is not sufficient to fulfill their domestic requirements. Foreign Direct Investment (FDI) is an important part of the foreign capital which fills this gap in the domestic savings and thus plays a crucial role in the developmental process. This paper tries to analyze the trends of foreign Direct Inflows in India during the period 2000-01 to 2020-21. Our analysis shows a sharp rise in the FDI inflows in India during the chosen study period which is the period after a decade of economic reforms in India. However, the study shows some fluctuations in the FDI inflows which have been analyzed in the paper.

Impacts of Foreign Direct Investment in India

Impacts of Foreign Direct Investment in India

A comparative analysis of Indian and Chinese FDI into Africa: The role of governance and alliances

This paper adopts and extends the theoretical lens of institutional imprinting to international business research. It analyses a secondary data set on Indian and Chinese foreign direct investment (FDI) flows to Africa, compiled for the period ranging from 2008 to 2018, to highlight the distinctiveness of Indian FDI. It argues that Indian FDI streams into better governed host countries with controlled corruption and high standards of accountability. This is in striking contrast with Chinese FDI, which is impervious to host country governance standards in its geopolitical quest for gaining economic supremacy in the region. India’s membership of the Commonwealth (CW) plays a vital role in the location and volume of its investments to Africa, whereas the Chinese Belt and Road Initiative (BRI) wields no influence on the location of its investment.

Does FDI Generate Employment? An Empirical Study of Indian Service Sector

<p>Foreign Direct Investment (FDI) considered as a component of investment is needed by India to accomplish the ambition behind economic reforms and speed up the growth of the economy. The inflow of FDI in India initially was low due to regulatory policy framework but there is a sharp rise in investment flows from 2005 onwards as the new policy has broadened. The purpose of this paper is to look for evidence regarding the precise relationship between FDI inflows and employment in service sector of India. The used Auto-Regressive Distributed Lag (ARDL) model explains long run and short run relationship between FDI inflows and employment in service sector. The empirical results confirm that though negative relationship exists between FDI and employment in service sector but it is not statistically significant. According to the findings, FDI introduces skilled skewed technical changes to the host country, increasing demand for highly skilled employees. Because India’s labour force is relatively unskilled, FDI in the service sector fails to provide jobs for the country’s rising labour force. The ARDL results also confirm the existence of the long run co-integration between FDI and employment in service sector. The finding shows that the stock of the FDI is a significant factor for Indian service sector.</p>

Economic Factors and Foreign Direct Investment in India: A Correlation Study

Foreign Direct Investment (FDI) plays a pivotal role in the process of economic development particularly in the capital scarce country, where the domestic base of created assets like technology, skills and entrepreneurship are quite limited. It provides financial resources for investment in a host country and thereby augments domestic saving efforts. It also plays an important role in accelerating the pace of economic growth. FDI provides the much-needed foreign exchange to help the bridge the balance of payment or trade deficit. FDI brings complementary assets such as technology, management and organizational competencies and there are spillover effects of these assets on the rest of the economy. FDI is treated as a main engine of economic growth and technological development which provides ample opportunities in accelerating economic development. FDI contributes to exports directly and an enhanced export possibility contributes to the growth of the host economies by relaxing demand side constraints on economic growth. The present study adds to the existing literature on determinants of FDI by examining the degree of correlation between FDI inflow in India and several economic factors like exchange rate, GDP, openness of trade etc.

CONSIDERING CORRUPTION, INFLATION, INFRASTRUCTURE AND TRADE TO EXPLAIN FOREIGN DIRECT INVESTMENT INFLOWS IN INDIA POST LIBERALIZATION

This paper considers corruption, inflation, infrastructure and trade to fit models to explain the inflow of foreign direct investment in India post liberalization. For this purpose, data from 1995 to 2019 is used considering the consistent availability of data for all the variables during this period. Timeseries regression is performed on standardized independent variables to control for multicollinearity. Two models are estimatedone having a doublelog form and one without converting the explanatory variables into logarithms.It is found that corruption is signifi cant at 5% significance level in both the models. Trade is significant at 10% significance level in the doublelog model while it is insignificant in the other model. Also, infrastructural variables i.e. energy and transportation are both insignificant in doublelog model while energy is significant and transport is insignificant in the other model. Consumer price index is used in place of inflation as it does not make sense to convert inflation rate into logarithm. Itis found to be insignificant in both the models.

An Analytical Study on Relationship Between Goods and Service Tax and Foreign Direct Investment in India

Since the implantation of the LPG policy during 1991 in India many companies have seen India as the hub of investment. To accelerate these foreign investments into the economy the government of India has taken another major step to attract the foreign investments on 1st July 2017 called the Goods and Service Tax implementation. GST has increased the ease of doing business and eliminates the cascading effect of tax on goods and services. These are a few of the major reasons for attracting FDI in India. The paper throws light on importance of GST and its relationship with FDI in India.

Linkage between Health Expenditure and Foreign Direct Investment in India

Linkage between Health Expenditure and Foreign Direct Investment in India

Bilateral Investment Treaty and Foreign Direct Investment in India

India has one of the largest Bilateral Investment Treaty (BIT) networks with other counties around the world. The BITs is to promote foreign investment by increasing investor confidence, empowering individual private parties to take international arbitral proceedings against the threat of appropriation by the government of the host country. This paper analyses the effect of BITs on FDI inflows in India using panel data for 76 countries for the time period 2000-2016 applying a dynamic panel generalised method of moments instrumental variable estimation method. The differenced GMM and system GMM estimates show a significant negative effect of bilateral investment treaties on the FDI inflows in India. While the lagged FDI has a significant positive effect, the financial openness of the source nations is reducing FDI inflows to India. The POLCON index shows that the countries with lesser political constraints have positive FDI outflow towards India. As opposed to domestic variables, the Chinn-Ito and POLCON indices have a greater share of change in FDI inflows to India. It seems that the BITs is not efficient enough to create investor confidence to invest in India.

Trends and Patterns of Foreign Direct Investment in India: An Empirical Analysis

India embarked on a journey of economic reform in 1991 in order to remove the structural and institutional bottlenecks that were plaguing the Indian economy. The objectives of reforms were to achieve higher growth and efficient utilization of resources and thereby redistribution of resources. The reforms introduced in 1991 could be characterized as liberalization, privatization and globalization. Attracting FDI as an addition to existing pool of resources was one of the major objectives of reform. Since 1991, inflow of FDI in India has been rising steadily. The process that begun in 1991, has been constantly reformed in order to achieve the aspiration goals of India. The recent regime in India has reinvigorated economic reforms and thus helped in attracting historic level of FDI inflow. There seems to be a point of break around 2014 which marks that FDI inflow has peaked considerably thereafter.

The Sectoral Investments Impact On Foreign Direct Investment In India

The study covers several aspects of FDI in the country, ranging from FDI patterns and FDI drivers to FDI relations, growth and exports, taking into account several factors such as the formation of raw equities, macroeconomic stability, institutional capital and human capital. In recent years, the FDI has increased so greatly that it has surpassed all other metrics of economic transactions. Countries are bidding for the highest levels of FDI, as they are the cheapest foreign funding. The FDI rate has increased to the developed countries in the last two decades, compared to the previous trend. There may have been a surprising rise of Asia as big FDI recipients. In the 2014 industry review, the highest FDI for the service sector was found. In the fields of training, accounting, infrastructure and telecoms, most of the FDI inflows are generated. The self-employed industries authorize government investments in chemical, metallurgical, automobile, Pharmaceutical and tourism sectors. The main recipient is FDI, but FDI flows are subject to policy constraints. Despite the lack of restrictions on FDI inflows in metallurgical, chemical, automotive, pharmaceutical and tourism industries, FDI growth in those sectors was much lower than in the FDI markets for utilities and telecoms.The study focuses on Foreign Direct investment (FDI) flows impact on select sectoral growth in India.

The Indian Economic Factors Impact on Foreign Direct Investment (FDI) On Indian Economic Growth.

The study covers several aspects of FDI in the country, ranging from FDI patterns and FDI drivers to FDI relations, growth and exports, taking into account several factors such as the formation of raw equities, macroeconomic stability, institutional capital and human capital. In recent years, the FDI has increased so greatly that it has surpassed all other metrics of economic transactions. Countries are bidding for the highest levels of FDI, as they are the cheapest foreign funding. The FDI rate has increased to the developed countries in the last two decades, compared to the previous trend. There may have been a surprising rise of Asia as big FDI recipients. In the 2014 industry review, the highest FDI for the service sector was found. In the fields of training, accounting, infrastructure and telecoms, most of the FDI inflows are generated. The self-employed industries authorize government investments in chemical, metallurgical, automobile, Pharmaceutical and tourism sectors. The main recipient is FDI, but FDI flows are subject to policy constraints. Despite the lack of restrictions on FDI inflows in metallurgical, chemical, automotive, pharmaceutical and tourism industries, FDI growth in those sectors was much lower than in the FDI markets for utilities and telecoms.The study focuses on the impact of Indian Economic Factors on Indian foreign direct investment.

Impact of Covid-19 On Foreign Direct Investment in India

India is the second well known nation on the planet after China. It is a fundamental for a nation like India to draw in more FDI for each area of the economy. The Government of India in interview with the RBI chose to pursue increasingly liberal disposition towards FDI in center divisions acknowledges guard area.Initially evaluation of information identifying with India's major monetary pointers recommend that India's financial presentation has improved significantly during the most recent 16 years of advancement time and much has been left to be accomplished in the years to come.Regularly Indian enterprises are inadequate in these imperative perspectives. Plant and types of gear can more often than not be financed out by FDI, and a savvy decision can be made in the light of the parent organization's learning and experience accordingly coming about into and powerful working which is additionally of vital importance structure Indian organizations purpose of perspectives. The information relating to endorsement of outside direct speculation uncovers that the greater part of the absolute affirmed ventures are in the five states to be specific Maharashtra, Delhi, Tamilnadu, Karnataka and Gujarat. Maharashtra with 4972 tasks (19.80 percent) worth of Rs.36602.4 crores has represented the primary position in the complete endorsement of remote direct venture. Delhi with 2763 ventures (11 percent) and with an estimation of Rs.30303.8 crores comes in the subsequent position.