A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans". FDI is the sum of equity capital, long-term capital, and short-term capital as shown in the balance of payments. FDI usually involves participation in management, joint-venture, transfer of technology and expertise. Stock of FDI is the net (i.e., outward FDI minus inward FDI) cumulative FDI for any given period. Direct investment excludes investment through purchase of shares (if that purchase results in an investor controlling less than 10% of the shares of the company).
Foreign direct investment in India is a major monetary source for economic development in India. Foreign companies invest directly in fast growing private auspicious businesses to take benefits of cheaper wages and changing business environment of India. Economic liberalisation started in India in wake of the 1991 economic crisis and since then FDI has steadily increased in India,[1][2] which subsequently generated more than one crore (10 million) jobs.
On 17 April 2020, India changed its foreign direct investment (FDI) policy to protect Indian companies from "opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic", according to the Department for Promotion of Industry and Internal Trade.[3][4][5][6] While the new FDI policy does not restrict markets, the policy ensures that all FDI will now be under scrutiny of the Ministry of Commerce and Industry.[7][8]
- ^ R. Nagaraji. "What Has Happened since 1991? : Assessment of India's Economic Reforms" (PDF). Igidr.ac.in. Archived from the original (PDF) on 23 December 2015. Retrieved 12 October 2015.
- ^ "How the Indian economy changed in 1991–2011". The Economic Times. 24 July 2011. Archived from the original on 26 October 2015. Retrieved 11 October 2015.
- ^ "India to China on FDI Policy: Changes in FDI rules don't violate treaties". The Times of India. 22 April 2020. Archived from the original on 22 April 2020. Retrieved 22 April 2020.
- ^ "Govt tweaks FDI rules to shield domestic firms. Thank you, tweets Rahul Gandhi". Hindustan Times. 18 April 2020. Archived from the original on 17 May 2020. Retrieved 22 April 2020.
- ^ "China's protest of India's revised FDI Policy: A process of de-globalisation begins opine experts". The Financial Express. 22 April 2020. Archived from the original on 23 April 2020. Retrieved 22 April 2020.
- ^ "Archived copy" (PDF). Archived from the original (PDF) on 21 April 2020. Retrieved 27 April 2020.
{{cite web}}: CS1 maint: archived copy as title (link) - ^ Suneja, Kirtika (22 April 2020). "FDI policy does not restrict market access: Officials". The Economic Times. Archived from the original on 5 July 2020. Retrieved 22 April 2020.
- ^ Tripathi, Dhirendra (22 April 2020). "Scrutiny is key to allowing Chinese presence in India". Livemint. Archived from the original on 22 May 2020. Retrieved 22 April 2020.
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