Arsalan Ali (1335177)

Jehanzeb Shaikh (1335185)

Mudabbir Khalil (1235204)

Muzzamil Ali (1235214)

Shafaat Ayub (1335202)

Overview

INTRODUCTION TYPES OF FDI METHODS OF FDI IMPORTANCE OF FDI

FDI IN INDIA

LITERATURE REVIEW

CONCEPTUAL & THEORETICAL FRAMEWORK

SUGGESTION FOR PAKISTAN

CONCLUSION

Introduction

Foreign direct investment (FDI) is one of the types of direct investment by any individual, corporation or country into another country in terms of investment into production or business facility.

FDI can be done by purchasing the host country’s countries company or by expending the operations of existing company that is based in host country

FDI is considered to build new amenities, if FDI is taken in broader sense it includes acquisitions, mergers, development of new facilities and structures, and reinvesting the money earned from global operations.

Types of FDI

1. Horizontal FDI

It is the type of foreign direct investment when foreign firm establishes its operation into host country in the same ways of its home country, with all actives and procedures.

2. Platform FDIIt is the form of foreign direct investment when a firm is investing into the host

country to make the export from host country to third country.

3. Vertical FDI

It is the form of foreign direct investment when a firm is investing into host country to either move upward or downward in terms of operations, production and so on.

Methods of FDI

1. Through incorporation of company/wholly owned subsidiary

2. Acquisition of shares of any targeted countries enterprise

3. Through mergers and acquisition

4. Participation into equity, joint ventures alone or with other participants who are doing so.

Importance of FDI

Foreign country is contribution its procedures, expertise and activities that enhances the current situation of the country

Transfer of latest technology

Generates employment opportunity

Improves human resource skills

Direct relationship between FDI & GDP

FDI host country’s financial markets must have to be strong and perfect

India’s financial sector is well developed, workers available.

India is a great target for research and development activities due to cost effectiveness

India needs inflows to drive investment in infrastructure.

In the World Bank’s ranking of countries on Ease of Doing Business, India ranks 132; and stands at 173 for the ease of starting a new business.

India stood at 94th position in Transparency International’s 2012 Corruption Perception Index.

Literature Review

Literature Review

Foreign investors has been pulling out of the Indian economy. A record outflow of foreign investments of Rs. 44162 crore in 2013.

Giants like Posco pulling out of its Rs. 30000 crore steel plant project in Karnataka followed by ArcelorMittal pulling out of its Rs. 50,000 crore project in Odisha due to delays and land acquisition delays.

The GDP has hit its lowest patch in the last 10 years to 4.8%.

The slow pace of policy reform that would further open sectors such as retail, insurance and real estate to foreign investment have acted as a deterrent.

Delays in framing a new land acquisition act, which would ease availability of land for industry, have also hurt FDI flows into infrastructure and other sectors.

Conceptual and Theoretical Framework

Foreign Direct Investment

Indian Economy

INDEPEDANT VARIABLE

DEPENDANT VARIABLE

Suggestion For Pakistan

To attract more FDI, policy makers require friendlier and favorable environment for foreign investors to invest in Pakistan

More incentives should be provided to the foreign investors in order to transfer technology to Pakistan, this would help the local SME‘

Import-substitution policy should be made so that it may help in relation with FDI

FDI is an important growth factor in World economy

Benefits of FDI Training of manpower, new avenues of knowledge, market networking, transfer

of technology and other expertise

To attract Foreign Investments developing countries have in use of valuable policies and belligerently rough economic restructuring and reorganizing.

During World recession every country faced decline in FDI except Oman, Chile, Indonesia, Spain, and Poland, as they had well-built growth in inner investment development

Multinational enterprises (MNEs) reduce their tax hurdle through overseas business which built a strong relationship between FDI and tax rates

Governments ensure that MNEs pay the tax due without undermining their attractiveness for FDI which is a huge challenge faced by government

Conclusion

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