Foreign investment in India 1947-48 to 2007-08

Foreign investment plays an important role in the long-term economic development of a country by augmenting availability of capital, enhancing competitiveness of the domestic economy through transfer of technology, strengthening infrastructure, raising productivity, generating new employment opportunities and boosting exports. Foreign investment, therefore, is a strategic instrument of development policy.

In the wake of economic liberalisation policy initiated in 1991, the Government of India has taken several measures to encourage foreign investment, both direct and portfolio, in almost all sectors of the economy. However, the emphasis has been on foreign direct investment (FDI) inflows in the development of infrastructure, technological upgradation of industry and setting up Special Economic Zones (SEZS).

India has consistently been classified as one of the most attractive investment destinations by reputed international rating organisations. With a vast reservoir of skilled and cost-effective manpower, India offers immense opportunities for business process outsourcing (BPO). knowledge process outsourcing (KPO) and engineering process outsourcing (EPO).

In spite of the fact that India is strategically located with access to a vast domestic and South Asian market, its share in world's total flow of direct/portfolio investment to developing countries is dismally low. China, with GDP size 2.2 times of India, is able to attract 20 times the FDI inflow to India. Similarly, Singapore, Indonesia, Philippines, and Thailand also attract greater amounts of foreign investment than India.

The current world scenario calls for further liberalisation of norms for foreign investment in India. The present book deals with almost all aspects of foreign investment in India. It particularly focuses on current policies and procedures for foreign direct investment as well as foreign portfolio investment. Foreign investment policies of other countries have also been highlighted to make suitable comparisons with India's policies in order to underscore the measures that are needed to attract higher levels of foreign capital and technology.