Tuesday, 11 November 2014

Is FDI good for India? | GD Topics

Is FDI good for India:

Points to be known :- 

  • Full form of FDI is 'Foreign Direct Investment'.
  • FDI can be defined as 'one company can invest on physical means such as lands, factories and mines in another company of another country to acquire lasting management interest'.
  • The host company and the company, which is investing together form a 'multinational corporation' (MNC).
  • Through FDI, the company, which invests will have control over the host company.

In Favor :- 

  1. FDI helps in the economic development of the host country (where the investment is being made).
  2. For origin and host countries, FDI provides access to new technologies, products, skills and organizational and management strategies.
  3. Employment increases in the host country.
  4. Origin country (the country which makes the investment) also develops economically.
  5. Competition increases. So that, with the competitive spirit, every company improves to its best.
  6. Through FDI in production companies, price reduction is possible.
  7. FDI is a boon for the small companies to become more actively involved in international business activities.
  8. Agriculture related people get good price for their goods as middle men will be eliminated.

In Against :-

  1. With the FDI in retail sector, small companies and merchants will suffer a lot.
  2. Inflation (the rise in prices over a period of time) may be increased.
  3. Technological dependence on foreign technology sources.

Conclusion :-
             FDI is good for any country to develop economically and also technologically.

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