Foreign Direct Investment Disadvantages

Maryland, easy forex heb. Of mice and men essay Hamilton essay on fdi in retail sector in india

The United States is both the world’s largest foreign direct investor and the largest beneficiary of foreign direct investment. While there may be many positive advantages to foreign investments, such as: increased productivity and economic development simulation, there are and equal amount, if not more, disadvantages. Direct foreign investments cause less domestic investments to occur within the United States and they could possibly even lead to Modern-Day Economic Colonialism. The United States Foreign Policy is a guideline that limits and allows overseas trade within the country. It is used to as a form of security to protect the United States' well-being, to make sure that trade with other countries and organizations won't jeopardize the

India has emerged as a trading superpower and as an increasing magnet for FDI.  Its role in the international economy to this point has been less remarked than the rise and dominance of China but increasingly India will be appreciated for the opportunities it is creating for its citizens, employers and foreign and domestic firms.

•  India's $250 billion retail business is the eighth largest in the world and has the potential to grow 7 per cent by 2011. [McKinsey Report] For a company already dominating the world markets, this is an un-passable opportunity.

Therefore when M&S go to India they will have to pay more money to get small things done it will not be like the UK as in the UK if you like something to be done you do it the legal way. The corruption level is high in India due to the fact that the vast majority of India’s rural population continues to be poor 25% of India’s population still live below the poverty line which is under £1 per day.

4b.The next article, “Their oyster, with grit included”, discuses cross border deals that India is involved in. Most Indian firms are aspiring to be multinationals, and succeeding. Some of the way these firms are achieving this is through vertical integration, acquisition and using a Greenfield approach. This is successful because Indian workers are already used to a very diverse workforce. Another approach that is gaining success is firms being pocket multinationals meaning that acquire small businesses abroad and use those small businesses to maintain a presence. A benefit of being a pocket multinational is having access to new technology, products and markets but merging to different very cultures of two different firms is always a challenge. Foreign firms in investing in India are not having the easiest time either. Most Indian

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

In India, the middlemen between the producer and the retailer also played a prominent role in the retail and wholesale industries. Walmart’s proposal was to cut out these middlemen and to connect the producers directly to the retailers, in order to reduce the inefficiencies in India’s traditional supply chain. This was to be implemented through the joint venture, wherein Bharti would manage the retail store operations and Walmart would focus on logistics capabilities and building the supply chain. However, cutting out middlemen would create more opposition to Walmart’s presence in India. Notwithstanding the benefits that Walmart could bring to India, the retail lobby increased its protest against Walmart’s entry to the Indian retail

At a first glance, India seemed to be the most promising market for investment for several reasons. First of all, India’s population increased quickly reaching to be 1.2 billion in 2013. The middle class which was the main Walmart’s target was estimated at 25% of Indian, and was anticipated to grow to 583 million by 2025. Moreover, there was an important economic growth noticing the increase of GDP which did India, the fifth larger retail industry in the world with the size of retail trade to reach at $200 billion. India’s young population which constituted a big purchasing power was growing, too. This generation was born when India’s economy began to boost, so, they regarded that the foreign investments were a good way to create more employment opportunities at the retail sector. Also, because of the advertising and promotional activities, these young people were receptive to foreign stores like Walmart regarding them prestige symbols. Last but not least, Walmart knew that India offers cheap raw materials and workforce. In this way, Walmart tried

Wal-Mart will have to wait for some time before the Indian government is able to change the law that does not allow foreign, multi-brand retail stores to set up shop. These large retailers are seen as a threat to the small retailers dispersed amongst the country 's retail scene. These small retailers provide employment to tens of thousands of people which may become unemployed in the case that India allowed the entrance of large multi-brand companies. These rules don 't apply to the wholesale sector creating a loophole through which Wal-Mart may set up a joint venture with local companies such as Bharti Enterprises. The government allows 100 percent FDI in cash-and-carry operations and 51 percent in single brand operations. Wal-Mart would therefore have the opportunity to enter a cash-and-carry operation with a 50 percent stake.

That is why fdi (foreign direct investment) show huge growth with the last decade. Many foreign companeis (pepsico, nokia, walmart, general electrical etc) and bank (citi bank, standard chartered, abn amro etc) are entering in India day by day however many more is to come. |

In India, the process of retailing is one the main pillars in economy which mainly accounts for 15 percent of the GDP. Our Indian retail market is amongst the top five retail markets as per the economic value in the world. Having 1.2 billion people, our country is the fastest growing markets in the retail sector in the world. Earlier there were mainly the small shops markets in India

FDI is freely allowed in most sectors, including the service sector. FDI for virtually all items or activities can be bought in through the Automatic Route under powers delegated to the Reserve Bank of India and for the remaining items or activities through the Government approval. Government approvals are accorded on the recommendation

* Strict Regulation to prevent entry of global retailers to operate freely into India. Indian retail industry is

Foreign Direct Investment can have many problems and benefits, a problem with many FDI’s is that its done in the deveoped countries rather than the countries that need FDI plan such as Nigera, Cameroon and Somalia meanwhile when an FDI project is planned in a country and on a large scale then its very benefecial for the countries economy According to data.worldbank.org Foriegn direct investment means that the invester