Relevance Of FDI In India

Foreign Direct Investment plays a vital role for underdeveloped and developing nations. With increasing Globalization, FDI has also increased. The underdeveloped and the developing countries lag behind in many ways. They do not possess required level of saving and income, the capital required for investment and a force of skilled labor. The underdeveloped and the developing nations have plenty of resources but they unfortunately lag the technology to evade these resources. For the same, FDI may be considered as a tool that bridges the gap between the available resources and the required funds. Since India is a developing nation, one can find a high relevance of FDIs here.

Since 1991, the rules and regulations for FDIs are relaxed. FDI as a long term development program is not just useful for the citizens but also strengthens technology, gives an edge with respect to infrastructure, generates productivity and provides new employment opportunities. FDIs act as a catalyst for the economic development and growth of a country. It helps to achieve Self-Reliance in various sectors and an overall enhancement. Various recent policies have also emerged to boost the inflow of FDIs in India, such as: 100% FDI allowed in medical sciences, single brand retail, telecom sector, asset reconstruction companies, etc.

Since a few years, in India, a lot more changes have taken place in various arenas, FDI being one of them. Recently, the Government of India (GOI) has been discussing on a proposal to increase the FDI limit in media sector from 26% to 49%. And, GOI is expected to take more liberal steps in other sectors to increase the flow of FDI in India. GOI is trying to take the economic growth to a higher platform with the medium of FDIs. India has already marked its presence as one of the fastest growing economies of the world, and with continuum efforts it is striving to see a shining and a brighter tomorrow.

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