Volume : IV, Issue : XII, December - 2015

FDI AND INDIAN ECONOMY–: Issues, Challenges and Prospects in India

Dr M. S. Khan, Amir Moin Khan

Abstract :

In this paper, I have attempted to identify the issues challenges and prospects associated with India’s current foreign direct investment regime, and more importantly the other associated factors responsible for India’s unattractiveness as an investment location. Despite India offering a large domestic market, rule of law, low labour costs, and a well working democracy, her performance in attracting FDI flows has been far from satisfactory. A restrictive FDI regime, high import tariffs, exit barriers for firms, stringent labour laws, poor quality infrastructure, centralized decision–making processes, and a very limited scale of export processing zones make India an unattractive investment location. On the other hand, Foreign Direct Investment (FDI) as a wholeis the most important driver of growth. It is also an important source of non–debt financial resources for country for economic development. Besides this it is a means of achieving technical know– how and a source for employment generation. Although, many are of the view that FDI is a big threat to the sovereignty of the host and indigenous business houses, & faster consumption of natural resources for making profit, may deprive host from such resources in long run. In between of the debate on pros and cons of FDI, world economy has observed a tremendous change in volume and pattern of FDI. There is a clear cut and intense global competition of FDI. India is not behind this global race of attracting these investments. India is an attractive FDI destination for services but has failed to be a manufacturing hub, which has also a greater economic benefit. FDI though one of the important sources of financing the economic development, but this is not a sufficient solution for poverty eradication, unemployment and many other economic ills. India needs a huge investment to achieve the goals of vision 20–20. The Policy makers also need to ensure full transparency and consistency in making policies along with a comprehensive and strong long–term development strategy

Article: Download PDF    DOI : https://www.doi.org/10.36106/paripex  

Cite This Article:

Dr M.S. Khan, Amir Moin Khan FDI AND INDIAN ECONOMY-: Issues, Challenges and Prospects in India Paripex-Indian Journal Of Research, Vol: 4, Issue : 12 December 2015


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