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Q. Foreign direct investment (FDI) is a like double edged sword. In this light discuss the positive and negative impact of FDI in India. Also suggest suitable measures to improve FDI in India.

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FDI is an investment made by a firm or an individual into business interest located in other countries. Unlike, portfolio investment the investor in FDI acquire foreign business asset, ownership or controlling interest in foreign company.

FDI equity inflow in India in 2018-19 stood at $44 billion. Further, according to UNCTAD’s World investment report, India is 10th largest recipient of FDI in world.

However, some economists have also criticized FDI on various grounds due to its negative impact, such as:

Overall FDI has a positive impact on the economy therefore there is a need to adopt following steps:

The best practice in form of establishing Investment Facilitation Cell like- Japan cell and Korea cell need to be further strengthened.

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