Is FDI good for India?

What is FDI :- 

  • FDI ( Foreign Direct Investment ) is the investment by a foreign companies in domestic companies.
  • The host company and the company that is investing together form a ‘multinational corporation’ (MNC).
  • Through FDI the investing company will have control over the host company.

In Favor :- 

  • FDI helps in the economic development of the host country, where the investment arrives.
  • For origin and host countries, FDI provides access to new technologies, products, skills and organizational and management strategies.
  • Employment opportunities increases in the host country.
  • Origin country, which means the country that makes the investment also develops economically through profits earned.
  • Competition increases. With 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.

Against :-

  • Dominance of foreign companies over Indian companies can sometimes be detrimental to domestic interests.
  • Inflation (the rise in prices over a period of time) may increase.
  • With the FDI in retail sector, small companies and merchants will suffer.
  • Technological dependence on foreign technology sources.
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Conclusion :-

FDI is beneficial for any country to develop it’s economy and technological talent. But, FDI’s share should be limited to 49% to avoid foreign companies’ dominance over Indian companies.

Your Turn…

Do you think FDI is good for India? Express your thoughts in the comment section below.

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20 comments ✍

  1. FDI is useful for development to the host country.if any foreign company opens a company in our country that would be profit in our economy development,technologies for our country .origin company would need employment so it will heir employees form our country and good things is that our government will not allow to them to advertise or sell only theirs won product. they will sale host countries product as well ,where by host country will get indirect profit and farmers will get good profit in exchange of their hard work. it will develop new technologies skill and new strategies.i must say this is a best way to increase our economy worth.

  2. all point which is mentioned above is okk but there should be some rule and regulation of fdi. a/c to me FDI wouldn’t be in some sector like agriculture , retailer and the work which could have done in small scale becz as we know that almost 30-40 % people living in india below poverty line and if fdi would be allowed in these sector ‘
    in that case people have to face a lot of problem for livelihood. in that case economy of india will not develop.

  3. Farmers should get most benefit of the production cycle as their efforts directly add to the GDP of the country. Therefore if FDI allows farmers to get better price and elimination of middlemen then that should be welcome. Middlemen should enter into some business that can increase overall productivity/gdp of the country rather than eating into the share of the poor farmer.

  4. We must welcome FDI in retail sector because its good for India and also for an Indian. FDI has the quality to creates the the new India in ALL THE SECTORS. But more in Agri. sector because approx 18% people of total population working in this sector. farmers are very dejected, because they don't get their actual value of their HARD Work. Or our Govt. must Welcome The FDI with open Hand to INDIA became A Super power for the World in future . India get an opportunity to get the new technologies, Skills and new strategies. So as an Indian I must say WELCOME FDI. in Our COUNTRY A GREAT COUNTRY … INDIA 🙂

  5. Really it's very well explained. we should had accept FDI earlier. China is involve in FDI from 1992. I would say that like two sides of a coin, FDI in retail sector will also have its pros and cons. Like, if we consider its main advantages, we can say that it will bring modern technology, improve rural infrastructure, create a competitive market, enable our farmers to get better prices for their crops, Government will get an additional US$ 25-30 billion by way of taxes, a solution for food inflation as investments in cold storage chain infrastructure would reduce loss of agricultural produce and provide more options to farmers. And some disadvantages could be that we will be competing with such economies whose interest rates are as low a 4% as compared to our 14% to 16%. Also, we engage millions of uneducated and semi-educated people at various stages of retail business but Tesco and Wal-Mart will only engage smart and educated workforce in small strength, comparatively. Finally we can say that if FDI in retail is allowed with certain preconditions, it will help boost the Indian economy in the long run and will project a positive image of India regarding its liberalization policies. It will help growth of exports and employment generation.

  6. some points in for r written in negative under the sub heading " in against"… so clear & solid idea can't be generated and leads to confusion in the minds of the reader

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