OPPORTUNITIES AND PROSPECTS FOR FDI IN INDIAN INDUSTRIES

Abstract

Economy policy reforms have played vital role in the performance of the Indian economy since 1991. Among other
things, the reforms have involved opening up the economy, making it more competitive, getting the Government out
of the regulations, empowering the States to take more responsibility for economic management, and thereby
creating a kind of competition among them for Foreign Investment. Foreign Direct Investment (FDI) in India has
grown substantially in the last decade following the liberalization of Indian economy in 1991. FDI gives
opportunities to Indian Industry for technological up-gradation, gaining access to global managerial skills and
practices, optimizing utilization of human, and natural resources and competing internationally with higher
efficiency. Most importantly, FDI is central for India’s integration into global production chains, as it brings several
advantages like new capital, technology, managerial expertise, and access to foreign markets, involving production
by multinational corporations spread across location all over the world. India has one of the most liberal economy
policy frameworks for FDI and foreign technology transfer. FDI up to 100 percent is permitted under the automatic
route in most of the sectors.