What does FDI mean to the home/ host country – India

 FDI brings in more capital into the economy.

 It brings in the much needed foreign exchange – foreign currency.

 It also boosts the domestic economy and industries and generally triggers a positive economic ripple effect.

 It brings in more revenues for the Income Tax Department.

 Advanced technology touches the shores of the host country, along with technically superior human resource.

 Creation of new jobs also happens – and in India jobs can never be few!

The above mentioned points can also be considered to be the pros or benefits from FDI.

Which leads us to the cons of FDI in India:

 It can lead to the domestic companies losing their market share.

 Domestic companies may lose out to the competition altogether.

 Thus cons are always from the point of view of the host country and how FDI will effect its own economy.

 FDI in retail- which had been in the middle of the entire FDI related storm – also meant farmers, small retailers, and the mom and pop shops losing their business.

Sectors where FDI is ALLOWED and the latest caps.

 Railways – 100%

 Defence – 49%

 Telecom – 49% under automatic route and rest as per FIPB’s approval

 Insurance – 49%

 News Media – currently 26% and increase to 49% is in the talks

 Courier Services – 100%

 Single Brand Retail – 100%

 Civil aviation – 49%

 Construction Sector – 100%

 Credit Information Companies – 74%

 Power Trading – 49%

 Commodity Exchanges – 49%

 Oil refineries – 49%

 Stock Exchanges – 49%