Indian Economy Growth with the Methods of FDI

Dec 8
17:13

2019

Aravind Sreeharsha

Aravind Sreeharsha

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Gradually, India is turning into an open economy. India is the fourth favourite destination for foreign investment, withstanding the US, China, and Britain. India is a country where there is the availability of cheap and quality resources, unexplored markets, and stable economic policies. All these and the lucrative offers made by the government attracts lots of foreign investments.

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FDI has a direct bearing on the growth of the Indian economy. The country has been experiencing strong financial stability as well as steep economic growth.

Now,Indian Economy Growth with the Methods of FDI Articles how does FDI help in the betterment of a country? The methods of FDI help in creating employment opportunities, developing infrastructures, creating linkages in domestic firms, producing revenues in the form of taxes, and so on.

Financial and technical collaborations, joint ventures, and capital markets all are different forms of FDI that help in boosting the economy. There are certain criteria different countries need to follow. The approval of RBI and FIPB is necessary for investment in sectors like the manufacture of tobaccos and cigarettes, defence equipment, etc.

There are two methods of FDI by which investors can invest in India.

  • By setting up a separate legal entity in India under the Companies Act, 1956. The investment can be up to 100% of the capital.
  • Setting up a branch office in India under the observation of Foreign Exchange Management Regulations.

As per the analysis by FDI India, NRIs, QFIs, and foreign institutional investors get permission to invest in India.

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