This document provides an overview of foreign direct investment (FDI) and foreign institutional investment (FII) in India. It defines FDI and FII, compares the key differences between them, and outlines factors affecting FDI, top investing countries in India, sectors attracting FDI, advantages and disadvantages of both FDI and FII, and regulations around investment limits. The presentation also includes economic indicators, trends in FII inflows in India over years, and the relationship between exchange rates, stock market performance, and FII.

1. PRESENTATION ON FDI & FII Presented To: Ms. PallaviDawra Presented By: ParvMahajan Vinod Kumar Sanjeev Kr. Singh

2. ECONOMIC INDICATOR

3. GDP Growth Rate (in %)

4. Inflation Rate

5. Export and Import

6. Trade Balance

7. Definition of FDI Foreign direct investment is that investment, which is made to serve the business interests of the investor in a company, which is in a different nation distinct from the investor's country of origin. The parent enterprise through its foreign direct investment effort seeks to exercise substantial “Control” over the foreign affiliate company. Exp. - An American company taking a majority stake in a company in India.

10. Horizontal FDI

12. Market-Seeking

15. Fiscal incentives (Exemption from import duties)

16. Indirect incentives (Provides land and other resources)

17. Political stability

18. Market potential & accessibility

19. Large economy

21. SHARE OF TOP INVESTING COUNTRIES - FDI INFLOWS (US$ Mn.)

22. Share of countries

23. Investing in India – Entry Routes Investing in India Automatic Route Prior Permission (FIPB) General rule No prior permission required Only information to the Reserve Bank of India within 15 days of inflow/ Issue of shares By exception Prior Government Approval needed Decision generally Within 4-6 weeks

24. FDI Limit in Different Sector

25. Sectors attracting highest FDI Equity Inflows

27. Trade

28. Employment and skill levels

29. Technology diffusion and knowledge transfer

30. Linkages and spillover to domestic firms

31. Improved technology.

32. Management expertise.

34. Lottery Business

35. Atomic Energy

36. Retail Trading

37. Agricultural or plantation activities of Agriculture (excluding Floriculture, Horticulture, Development of Seeds, Animal Husbandry, Pisiculture and Cultivation of Vegetables, Mushrooms etc., under controlled conditions and services related to agro and allied sectors) and Plantations other than Tea Plantations)

39. insurance companies,

41. Mutual Funds

42. Insurance Companies

43. Investment Trusts

44. Banks

45. Endowments

46. Foundations

48. Year wise FII

49. Relation among Exchange Rate, Sensex, FII

51. This limit of 24% can be increased to sectoral cap/ statutory limit applicable to the Indian company by passing Board or shareholder resolution.

52. FIIs can purchase shares through open offer/ private placement/ stock exchange.

54. Increase Forex Reserve

55. Increase Domestic Savings and Investments

56. Large Availability of CapitalDisadvantages Problem of inflation Reduces flexibility of Policy makers Hot Money False representation of Economy Can’t be used for long term Problems for small investors

60. It enables a degree of control in the company.

62. It does not involve in degree of control in the company.