Analysis of Special Economic Zones in India

Countries would participate in foreign direct investments because it helps in the economic development of the country where the investment is being made. They also engage in FDI to reduce production costs.

Many governments, especially in industrialized and developed nations, pay very close attention to foreign direct investment because the investment flows into and out of their economies can and does have a significant impact.

• Preferential tax treatment: tax credits, tax rebates, exemptions on royalties, duties or tariffs, reduced tax rates, deferred tax liabilities and accelerated depreciation on energy-supply equipment;

Foreign Direct Investments are long term capital holdings directly invested in one country by another country. These foreign direct investments can be either outwards or inwards. The outward foreign direct investment is also referred to as investments abroad and is usually supported by the government against various types of risks associated with the investment1. It is also able to enjoy various types of incentives such as tax incentives. These are usually the investments invested by the country in to a foreign

of the state , import licensing, import prohibitions which would redirect the capital investment in the

When a multinational invests in a host country, the scale of the investment (given the size of the firms) is likely to be significant. Indeed governments will often offer incentives to firms in the form of grants, subsidies and tax breaks to attract investment into their countries. This foreign direct investment (FDI) will have advantages and disadvantages for the host country.

FDI is understood as capital investments in real assets (production) in other countries, which participates in the management of the investor.

The Foreign Direct Investment (FDI): is to invest and build new business in other country (Wild, 2015 ). OECD defines FDI as a key factor of enhancing and promoting the development of economy and stability of the country in the political and financial sector to improve the society as a whole (OECD , 20). Moreover, The UNCTAD explains the FDI by mentioning it as a relationship between two companies which means one company is going to do business in the other company as an investment (UNCTAD, 2007). It is making a new business, investment or company in a foreign country.

Foreign direct investment has many forms. Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations and intra-company loans".

of free trade. The goal is to help these countries create the capacity to build the

One striking feature of the sector financial system in recent a long time has been the growth of foreign direct investment (FDI), or funding by using transnational businesses in overseas international locations in an effort to manage belongings and manage production activities in those nations.

Foreign Direct Investment (FDI) is a major or key element in international economic integration. Foreign Direct Investment creates a stable, direct and long lasting connections between economies. It therefore encourages the transfer of technology know how between countries and allow the host country to promote its products more widely in international markets. It is also and additional source of funding for investments and it can also be an important form of development. Foreign Direct Investment is an investment in a business firm by an investor from another country in which the foreign investor has control or a significant degree of influence over the company or firm. The Organization of Economic Cooperation and Cooperation

With international firms now able to own equity in the newly opened Indian market, the automobile sector was flooded with many players who were drawn to its huge market potential, and became intensely competitive

Increase in fiscal Incentives[Fiscal incentives are no taxes given to new companies for the first 5 years]

Foreign Direct Investment is the investment of a country domestic assets into foreign structures, equipment and organizations, but does not include investment into stock markets. Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.