- 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 :-
- FDI helps in the economic development of the host country (where the investment is being made).
- For origin and host countries, FDI provides access to new technologies, products, skills and organizational and management strategies.
- Employment increases in the host country.
- Origin country (the country which makes the investment) also develops economically.
- Competition increases. So that, with the competitive spirit, every company improves to its best.
- Through FDI in production companies, price reduction is possible.
- FDI is a boon for the small companies to become more actively involved in international business activities.
- Agriculture related people get good price for their goods as middle men will be eliminated.
In Against :-
- With the FDI in retail sector, small companies and merchants will suffer a lot.
- Inflation (the rise in prices over a period of time) may be increased.
- Technological dependence on foreign technology sources.
FDI is good for any country to develop economically and also technologically.
Afterwords :- What are your thoughts on this topic? Feel free to express your opinion in the comment section below.