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FDI have helped India to attain a financial stability and economic growth with the help of investments in different sectors. FDI has boosted the economic life of India . Foreign direct investments helps in developing the economy by generating employment to the unemployed, Generating revenues in the form of tax and incomes, Financial stability to the government, development of infrastructure, backward and forward linkages to the domestic firms for the requirements of raw materials, tools, business infrastructure, and act as support for financial system

FDI is one example of international factor movements. A foreign direct investment (FDI) is a controlling ownership in a business enterprise in one country by an entity based in another country.

FDI is not permitted in the following industrial sectors:

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 Arms and ammunition.

 Atomic Energy.

 Railway Transport.

 Coal and lignite.

 Mining of iron, manganese, chrome, sulphur, gold, diamonds, copper, zinc.

 Lottery Business

 Gambling and Betting

 Business of Chit Fund

 Agricultural (excluding Floriculture, Horticulture, Development of seeds, Animal Husbandry, etc).

 Housing and Real Estate business.

 Trading in Transferable Development Rights (TDRs).

 Manufacture of cigars and cigarettes, of tobacco or of tobacco substitutes.

Various Entry Strategies for Foreign Investors in India

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1.An international company can start its operations in the country by setting up a company according to the Companies Act. The total amount of foreign direct investment that is allowed in such companies is 100%

2.By forming joint collaboration with an Indian partner.

3. By establishing a subsidiary that is wholly owned in such sectors where foreign direct investment up to 100% is allowed .

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4. By setting up branch office, representative office and branch office

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Advantages of this FDI policy changes

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1.Creation of employment

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2.Investment in India, resulting in appreciation of the rupee

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3.Better production, leading to increased GDP

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4.More choices for the Indian consumer

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Top 10 Reasons Why FDI isn’t Good for India

1.Bane to the small retailers

2.Would benefit China more than India

3. Would lead to real estate inflation

4.Wrong sector for FDI

5.No scope for the huge uneducated workforce

6. Rural India’s progress out of picture

7.Loss of jobs in manufacturing sector

8.Company may lose ownership

9.Country secrets may be disclosed

10.Difference in language and culture