Case Study of Fdi in India vs China

8121 Words Apr 3rd, 2013 33 Pages
A project ReportOnCASE STUDY OF FDI IN INDIA VS CHINASubmitted toMrs. Smita KashiramkaByRamya Singh2010B3A2613PIn Fulfilment ofStudy oriented ProjectBIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, PILANI30th November 2012 | | | | | |

| Abstract The report begins with the FDI definition and FDI reference with respect to India and its sect-oral and regional comparisons. This report undertakes a comparative analysis of the foreign direct investment (FDI) flowing from the multinational corporations (MNCs) into China and India. Examining the prevailing investment climate to account for the differences in FDI between the two countries and finally suggest some
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Kearney survey also found that China outranked the
U.S. as the most attractive destination for FDI. The importance of FDI to China is readily apparent. These discrepancies in the relative FDI attracting capabilities of India and China raise some important fundamental questions about the actual FDI potential of India. Can
India possibly become an FDI destination as attractive as China?.The Report addresses this question at large.

1.1 Definition of 'Foreign Direct Investment - FDI '
FDI refers to an investment made to acquire lasting interest in enterprises operating outside of the economy of the investor. Further, in cases of FDI, the investor´s purpose is to gain an effective voice in the management of the enterprise. Components of FDI-
The components of FDI are equity capital, reinvested earnings and other capital (mainly intra-company loans). As countries do not always collect data for each of those components, reported data on FDI are not fully comparable across countries. In particular, data on reinvested earnings, the collection of which depends on company surveys, are often unreported by many countries.
- United Nations Conference on Trade and Development (UNCTAD)

Foreign investment refers to investments made by the residents of a country in the financial assets and production processes of another country. It can come in two forms:
Foreign direct investment (FDI) and foreign institutional investment (FII).

FDI or Foreign Direct
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