Determinants of traditional and new forms of foreign investment.The case of Indian manufacturing.

The Research and Information System (RIS) for the Non-aligned and Other Developing Countries is an autonomous body set up in New Delhi (India), with the financial support of the Government of India.

RIS is a forum for providing analytical support to the developing countries on various international economic issues of concern to the process of their development.

Its aims and objectives, include among others, promotion of the concept of self-reliance among the non-aligned and other developing countries and forging and maintaining a system of effective links amongst the various research institutions of these countries with a view to utilize their research capabilities for the maximum common benefits. It also seeks to serve and effectively function on a continuing basis as a data bank/information storage and retrieval centre on global and regional problems bearing on the interests of non-aligned and other developing countries.

The RIS has initiated different types of publication series - Occasional Papers, Discussion Papers, Reprints, Digest on current issues and events, etc. with a view to generating debate on and awareness of current international economic issues among different sections of the Third World community.

In the recent years a growing proportion of the foreign production activity of multinational enterprises in developing countries has taken place through contractual modes rather than foreign direct investments (FDI). Given the many positive features of these new modes of foreign production from the developing countries' point of view, it is of interest to examine whether these are complementary or competitive to each other. The present paper by Dr. Nagesh Kumar attempts to do this analysis using the contemporary theoretical framework for 49 branches of Indian manufacturing industries. Such an analysis has important implications for the technology import policies. Hence, we hope that it would be found useful by the concerned policy makers in developing countries.

The views expressed in this Occasional Paper are those of the author and not necessarily those of the RIS