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12 Aug 2021

With the increasing acceptance of globalization the need for specialized FDI has become quite important. Over the years, FDI has become an integral part of the economy related to foreign direct investment. The Entry Modes of FDI in India has brought in several new opportunities for various companies to be able to get involved in International Business. It is beneficial for the local markets and business to look for additional resources that exist beyond the borders to ensure they can support the country’s economy, while ensure it keeps progressing and developing.  It further helps the country to get technological updates, improve economic conditions and enhance the domestic rates and so on. In the past, FDI has been always used as a medium for foreign exports and get access to international markets. However, the modern day benefits of it are not limited. Now, there are different advantages that come along with FDI, which includes a wide variety of job opportunities and technical advancements that help the country’s economy. Along with this, FDI also enhances the need for competition among the local business. FDI is built to increase the flow of money in the businesses all around the country, which impacts the overall growth. Along with the need for excellence the FDI also adds to the diversity of the business environment. The implications of FDI also add to a lot of benefits for both the investors and the recipients.

The inclusion of FDI majorly impacted the foreign investments that helped nations throughout the world that were struggling with poor economy. Likewise, FDI in India helped to support the economy, it opened up a wide range of opportunities for goods and trading services, exports and imports of goods, etc. It further also played an important role in enhancing the productivity in the neighbouring country. Along with this, the quality of goods and services also improve simultaneously. Apart from this, FDI also plays an important role in increasing the revenue for the receiving countries with the income through taxation.

Understanding different factors that both the investor and recipient refer to through FDI, there are different disadvantages too that come along with it. The advantages of FDI are directly relevant to the changes in the political scenario of that particular country. Thus, foreign investors investing through FDI might consider it very risky with the changing political conditions to survive in such environments. The difference in mind set and cultural awareness in two different political parties might impact the business conditions or cause disputes that might hamper running the business successfully. The host country is often found to struggle with labour disputes that is caused due to FDI regulations. This is viable because all the parties involved are considered as profit making parties. Earlier, FDI was also considered as a method that would disturb the employment market. There are individuals that consider, with foreign investors and retailers getting the opportunity, it will hamper the available retailers in the local market jobless, as it will reduce their opportunities to invest.

Considering that, India is one of the developing countries and one of the biggest democracies in the world; it consists of innumerable amount of resources. Thus, it also increases the number of opportunities available for both domestic and foreign investments. The FDI in Indian economy policies for the countries are liberated by keeping various things in mind. These include the regulations on industries, going through various investment policies and keep the FDI rules and need in mind. There are a wide range of reforms that the Indian government has brought, which include investment in very multi-brand retails making foreign investment more lucrative.


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