Foreign Direct Investment in India - a Valuable Proposition

larryjone@gmail.com (Larry Jone) — Tue, 4 Apr 2006 07:29:07 GMT

by Larry Jone
Tuesday, April 04, 2006

The great Indian nation seems to have lapped up 'foreign' tag to every economic activity. Foreign Direct Investment (FDI) is the latest catch phrase in the big Indian dream.

There were times when the liberal economic policies that were ushered in the country for the first time in 1991 by the then finance minister Dr. Manmohan Singh (the present day PM of India) were opposed tooth and nail by conservative and radical political parties of India. FDI was always the focal point during the critical days of Indian economic policy. But times have changed. The very political parties that opposed FDI on the grounds of being 'another indicator of western hegemony' have incorporated it in their national manifesto.

For the starters, FDI refers to capital inflows from abroad that invests in the production capacity of the economy. FDI is generally preferred over other forms of external finance due to its non-debt creating nature. Their returns depend upon the performance of the projects. FDI also facilitates international trade and transfer of skills and technology.

'Investment in India has become a never before opportunity for the foreign investors, not to forget.' - NRI.

India has opened up its markets for FDI in virtually every sector except defence, atomic energy, railway transport, and mining et al. The vast infrastructure sector is waiting to be explored in terms of foreign investment, especially property investment. Electricity, road network, steel industry, education, modernization of air transport, retail etc. are some of the vital areas that present a plethora of opportunities to a foreign investor.

The burgeoning IT industry of the country coupled with a massive English speaking population promises an adequate return on investment. The Non Resident Indians (NRIs) who went abroad for greener pastures are returning to their roots with an improved business environment in India. India has suddenly found itself as a potential world leader with even countries like US recognizing its potential in negotiating an exceptional nuclear deal.

India is a proverbial Garden of Eden waiting for its Adam and Eve in the form of foreign investors!

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Foreign Direct Investment in India - a Valuable Proposition