International Capital Movement

India’s economy is booming! With large decreases in poverty, increases in literacy and GDP, India is continuing to make its way out of the third world and into the first. India is predicted to surpass even China in growth by 2050. A competitive private capital market has instilled Indians with a low cost high quality mentality and has resulted in some of the highest return rates for any country. India has been averaging 6% growth compared to China’s 9.5% with half the investments. India capital efficiency is one of its strongest economic benefits.

Since the liberalization, privatization and globalization (L.P.G) in the early 1990’s the Indian economy has had a deep impact on its financial services sector, it is during this L.P.G era the reform’s in financial sector were initiated by the government of India to meet the challenges of complex financial architecture. This reform ensured that the new Indian financial system will forge out into a transparent, strong and resilient system. At present the Indian economy grew by 7.3 percent, a full year growth for the fiscal year ending in march based on the statistical method based of gross value added (GVA) keeping base year as 2011-2012 as against 2005.

According to Schmukler (2004), when financial institutions in one country are under duress, borrowers have the option to raise capital by issuing shares in domestic or international capital markets. The globalization of finance make the valuing and distribution of capital more efficient as changes in financial risks are revealed quickly. Furthermore, borrowers and investors can obtain better terms on their financing as “they are able to tap a broader pool of capital from a more diverse and competitive array of providers” (Häusler, 2002). Corporations can afford tangible investments because they have become substantially cheaper. As a result, these reduced rates improve economic activity and growth, in addition to economic prosperity. Emerging enterprises and reputable banks can source funds from a diverse group of providers, and build their businesses.

Trade and investment are highly connected that could be illustrated as two sides of the same coin. Companies conduct cross-border trade to supply their foreign investment, and they invest abroad to bolster their trade. Moreover, in the liberalisation era, while investors produce and consume both goods and services, an open trading system will provide a bright investment climate. Equally important, international trade and foreign investment have similar dominant actors through the presence of multinational enterprises.

International Capital mobility- the free flow of investment financing from one country to another is a hot topic in the world of economics. A common question that rises when discussing this matter is, does capital mobility benefit developing countries? As with most other subjects the answers tend to vary.

First, when the financial system is not liberalized, we noted that it has a negative effect on the growth of foreign direct investment per capita GDP. Second, when foreign direct investment is characterized implement them have a positive effect on economic growth of its financial industry in developed countries. This means that the key variable, which determines the degree of efficiency of FDI liberalization of the financial system. Therefore, foreign direct investment affect economic growth no liberalized financial system to challenge. Third, we found that the level of financial development is strategy variables and it has positive impact on growth.

One can now unambiguously call the process of liberalization and reforms a success story. Due to its philosophy of Gradualism in unbundling regulations and controls, and in unleashing the forces of market mechanism, economic reforms in India have been without any traumatic after effects. Indian model of gradualism has in fact become role model for the other emerging market economies. India’s step by step approach towards capital account convertibility has helped in skipping potholes of volatility disturbing the normal behaviour of exchange rates. The policy has yielded rich dividend and is now acclaimed globally. Controls on short term borrowings and capital outflows by the residents have kept the BoP safe from destabilizing speculation which causes spiralling changes in exchange rates. Financial liberalization in India has brought about a transformation in creating mature financial and capital markets contributing to growth and yielding better economic returns. Gradual global integration of the Indian financial system has produced laudable economic results skipping the

India has an amazing rate of growth which has reached to 9% in 2007. The average rate of growth is 7% since 1994. This is an important evidence of the stable development of Indian economy. Also unlike to other developing countries India managed to have a very low rate of inflation which has remained close to 4% since 2000 and has not fluctuated much then. India seems to be one of the safest economic environments for investment when compared to other Asian countries. Moreover India’s imports almost tripled between 2001 and 2005 from $50.1 billion to $138.4 billion, while exports more than doubled, from $43.3 billion to $99.7 billion. Another import point that should be noted

In order to meet the objectives of the study to analyses the Impact of Foreign Direct Investment on Indian Economy, annual data have been collected from 2007-2016. However to make analysis between financial performance of FDI based Companies and Non FDI based Companies listed at BSE for 10 years has been considered. This study is based on secondary data. The required data have been collected from CMIE Prowess IQ data base.The tools used in the study are panel data Fixed Effect Model, Random Effect Model, Hausman test and Chow test. The sample size is selected on the basis of FDI definition given by IMF i.e. if foreign shareholding is 10% or more than 10% in the company that company will be considered as FDI based

The research questions of the paper can be explicitly written down as: what is the impact of FDI on Economic Growth in Developing countries? What are the other factors which affect Economic Growth in Developing countries? It is important to mention here that this research addresses developing countries and the external validity of this research to developed countries is not advocated. To

The Indian economy is the second fastest growing economy in the world after China with a growth rate of 6.5%. India seems to have become an investor’s haven with high returns on investments for foreign Institutional investors. Indian companies are recording higher profits and are gaining global recognition because of operations in several countries. However, for international presence, Indian companies need funds from time to time to expand their business. Companies either raise funds from the domestic market or through international market. For international funding, the most popular source amongst the Indian companies in the recent times

Recently India’s Home Minister Mr. P. Chidambaram pointed out that surge in foreign capital inflow can be a cause of the rise inflation rate in the economy. This is true! With opening up of the economy, foreign capital has become one of the important factors affecting our economy. The country’s economic policies have changed. We are now an open economy affected by the economic and political happenings of the world. We therefore need to broaden our handling of domestic economic problems like inflation. Inflation is no more only due to supply constraints caused by domestic supply constraint caused by poor monsoon or floods. It is affected by global demand and supply of goods and capital.

This article seeks to find which of the macroeconomic variables among FDI inflow, current account balance, inflation and interest rate play a significant role in economic growth in Malaysia using the SPSS Regression method for a time period of 14 years from 1995 to 2008 (Oct). The results of the research indicated that FDI and inflation are not significantly related to economic growth in Malaysia during the period of study. However, CA

India's long term economic prospects will continue to remain sturdy in 2010-11 followed by lower growth rate at 7.7% for the FY 2011-12. Other than high inflation and rising financial deficit, the major areas of concern are rise in asset cost and the prospects of an unanticipated slowdown in the influx of foreign investment in India caused due by the chaos in worldwide financial markets. IMF

After getting independence in 1947, the government of India envisioned a socialist approach based on the USSR system to developing the country’s economy. The last decade of the 20th century witnessed a drastic increase in foreign direct investment (FDI), accompanied by a marked change in the attitude of most developing countries towards inward investment. FDI flows have grown in importance relative to other forms of international capital flows, and the resulting production has increased as a share of world output.. FDI in India has in a lot of ways enabled India to achieve a certain degree of financial stability, growth and development during recession. This money has allowed India to focus on the areas that may have needed economic attention and address various problems that continue to challenge the country. The factors that attracted investment in India are stable economic policies, availability of cheap and quality human resources, and opportunities of new unexplored markets. Mostly FDI are flowing in service sector and manufacturing sector recorded very low investments. The investments in service sector enhanced the benefit of flow of funds to the home country. Presently India is contributing about 17% of