disadvantages of fdi

Unstable economic conditions Much of FDI takes place in the developing world,which is just developing its economic systems. The market conditions in the developing world can be quite unstable and unpredictable. Unstable political and legal system-- A bigger problem may be unstable or underdeveloped political and legal systems. A company may have to deal with a corrupt or unstable political system.

Dear Uma > Disadvantage of FDI -- Crowding of local industry -- Loss of control -- Repatriation of profits/dividends by investor -- Conflicts of codes/laws players -- Possible exploitation of resources-material/ wages -- Effect on local culture/sentiments – socio cultutal effect reduced costs -- Effect on natural environment -- Large giants of the world try to monopolise and take over the highly profitable sectors. -- Such foreign companies invest more in machinery and intellectual property than in wages of the local people. -- Entry of MNC supermarket and hypermarket chains would cause severe displacement of small and unorganised shopkeepers and traders Thanks

**DISADVANTAGES OF FDI** 1--Unstable economic conditions Much of FDI takes place in the developing world,which is just developing its economic systems. The market conditions in the developing world can be quite unstable and unpredictable. 2--Unstable political and legal system-- A bigger problem may be unstable or underdeveloped political and legal systems. A company may have to deal with a corrupt or unstable political system. Additionally, he legal system may be underdeveloped.Contracts and property rights may not be easily enforced. 3--Too much foreign ownership of companies can be a concern,especially in industries that are strategically important. Thanks

Hiiii friend..... Thanks & Regards,

Disadvantages: -------------- Entry of global giants will force the Indian Traditional Kiryana Stores to shut down their business. 1.Profit will be distributed, investment ratios are not fixed. 2.An economically backward class person will suffer from price rise. 3.Market places will be located too far which will increase the travelling expenses. 4.There will be cross-culture conflicts 5.Exploitation of natural resources by foreign players 6.Inflation may be increased. 7.India will become slave due to entry of foreign players