Foreign investment is a subject of topical interest. Countries of the world, particularly developing economies, are vying with each other to attract foreign capital to boost their domestic rates of investment and also to acquire new technology and managerial skills. Intense competition is taking place among the fund starved less developed countries to lure foreign investors by offering repatriation facilities, tax concession and other incentives. However. Foreign Investment is not an unmixed blessing. Governments in developing countries have to be very heedful while deciding the magnitude, pattern and conditions of private foreign investment.
The wave of liberalization and globalization sweeping across the world has opened many national markets for international business. It is stated that FDI has to play a novel role in the world economy. The role of FDI has now transformed from a tool to solve the financial crises to a modernizing force. In past liberalization regime India has experienced tremendous growth in FDI inflows from an average of US $5-6 billion during previous five years; it has crossed the level of US $30 billion. But it still receives far less FDI flows than China and the USA or much smaller economies in Asia like Hongkong and Singapore in terms of GDP or Gross Fixed Investment. IT is not surprising, As India’s growth strategies have been reliant primarily on domestic enterprises; Mindset has changed during last decades only.
Foreign Direct Investment (FDI) has grown dramatically as a major form of international capital transfer over the past decade. Between 1980 and 1990, world flows of FDI-defined as cross-border expenditures to acquire or expand corporate control of productive assets-have approximately tripled. Foreign direct Investment (FDI) has made a dynamic surge into the world…...