FDI stands for foreign direct investment In the form of dominant ownership of a company in one country by a company based in another country. Therefore, it differs from foreign portfolio investment in the concept of direct management. An example would be Mcd opening up a lot of stores in India to diversify its sale.
Foreign direct investment (FDI) is not only a key driver of economic growth but also an important non-debt financial resource for the development of the Indian economy. Foreign companies invest in India to take advantage of relatively low wages and special investment incentives such as tax breaks.
Foreign capital has flowed into India due to the friendly political system and favorable business environment of the Indian government. The government has taken many initiatives in recent years, including easing foreign direct investment norms in sectors such as defense, PSU refineries, telecommunications, energy exchanges, and stock exchanges.
Some of the main disadvantages of foreign direct investment in India are:
The lack of adequate infrastructure is slowing the development of this country, the continent.
Cumbersome and slow federal administrative process (bureaucratic formalism) hindering economic reform Labor rules are still strong and some are the harshest in the world.
High corporate debt and bad assets (NPA) net importers of energy resources weak public finances.
