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Explain the features of FDI In India?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Renju M.R asked over 2 years ago

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4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 mithun answered over 2 years ago

Hi Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra company loans". In a narrow sense, foreign direct investment refers just to building new faciliti a lasting management interest in an enterprise operating in an economy other than that of the investor.FDI is the sum of equity capital, other long-term capital, and short-term capital as shown 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., inward FDI minus outward FDI) cumulative FDI for any given period. Direct investment excludes investment through purchase of shares. FDI is one example of international factor movements A foreign direct investment is a controlling ownership in a business enterprise in one country by an entity based in another country. Foreign direct investment is distinguished from portfolio foreign investment, a passive investment in the securities of another country such as public stocks and bonds, by the element of "control". According to the Financial Times, "Standard definitions of control use the internationally agreed 10 percent threshold of voting shares, but this is a grey area as often a smaller block of shares will give control in widely held companies. Moreover, control of technology, management, even crucial inputs can confer de facto control."

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Urmil answered over 2 years ago

Foreign Direct Investment can be described as investment made by a foreign entity in the equity of a domestic company (Target Company) with the intention of participating in the management of the enterprise. Features of FDI are as follows 1. In all such transactions there is a basic intention to participate in the management of the target company. 2. In most cases it involves a long term commitment, that is, there is no intention to seek quick capital gains. 3. By convention an investment is considered as FDI when it involves acquisition of a minimum of 10% of the paid up equity of the target company. 4. Generally all such investments are accompanied by technology transfers and access to newer markets therefore the partnership involves access to raw materials for the foreign entity and access to technology for the target company. 5. Such investments involve creation of physical assets which generally increase the productive capacity of the target company. This generates employment and consequently economic growth in the host country.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Ashika answered over 2 years ago

Features of FDI are as follows 1. In all such transactions there is a basic intention to participate in the management of the target company. 2. In most cases it involves a long term commitment, that is, there is no intention to seek quick capital gains. 3. By convention an investment is considered as FDI when it involves acquisition of a minimum of 10% of the paid up equity of the target company. 4. Generally all such investments are accompanied by technology transfers and access to newer markets therefore the partnership involves access to raw materials for the foreign entity and access to technology for the target company. 5. Such investments involve creation of physical assets which generally increase the productive capacity of the target company. This generates employment and consequently economic growth in the host country. 6. Investment by the foreign entity may involve fresh issue of capital or sale of shares held by promoters in the target company. Therefore such transactions are essentially primary market operations. In most cases there would be an effect on the balance sheet of the company.

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Open uri20170510 32134 ivjxpn?1494421728 Shreedhar Sutar answered over 2 years ago

Hi Renju M.r Foreign Direct Investment can be described as investment made by a foreign entity in the equity of a domestic company (Target Company) with the intention of participating in the management of the enterprise. **Features of FDI are as follows** 1. In all such transactions there is a basic intention to participate in the management of the target company. 2. In most cases it involves a long term commitment, that is, there is no intention to seek quick capital gains. 3. By convention an investment is considered as FDI when it involves acquisition of a minimum of 10% of the paid up equity of the target company. 4. Generally all such investments are accompanied by technology transfers and access to newer markets therefore the partnership involves access to raw materials for the foreign entity and access to technology for the target company. 5. Such investments involve creation of physical assets which generally increase the productive capacity of the target company. This generates employment and consequently economic growth in the host country. 6. Investment by the foreign entity may involve fresh issue of capital or sale of shares held by promoters in the target company. Therefore such transactions are essentially primary market operations. In most cases there would be an effect on the balance sheet of the company.

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