FDI from U.S.A

Abstract:

FDI from U.S.A to India is increasing at a very fast pace over the last few years due to the several incentives that has been given by the Indian government. The huge flow of FDI from U.S.A to India has given a major boost to the country's economy.

Foreign direct investment in India:

The government of India earlier restricted the entry of foreign direct investment into the country but then it liberalized the country's investment regulations in the beginning of 1991.

The two factors that help to make India one of the best destination for foreign direct investment are that the rate of wages in the country are much lower in comparison to the developed countries and it is the second biggest country in the whole world for it has a population of more than one billion people. The total amount of foreign direct investment in India stood at around US$ 48.2 billion from August, 1991 to December, 2006.

Flow of foreign direct investment from U.S.A to India:

The flow of FDI from U.S.A to India has increased at a very fast rate in the last few years and this has helped to make U.S.A one of the major countries investing in India. The total amount of FDI from U.S.A to India stood at ` 12,333.84 crores between 1991 and 2002. The total percentage of FDI from U.S.A to India came to 17.1% out of the total foreign direct investment in the country between 1991 and 2002.

Industries attracting FDI from U.S.A to India are:

• Telecommunications which includes services of basic telephone, radio paging, and cellular mobile
• Food processing industries
• Fuels
• Service sector which includes non- financial and financial services
• Electrical equipment which includes electronics and computer software

Results of FDI from U.S.A to India:

The results of FDI from U.S.A to India has proved to be beneficial for the country for it has led to the transfer of technology, creation of new opportunities for employment, and also economic growth of the country.

Last Updated on 3/18/2011