Foreign Direct Investment (FDI) refers to business investments or owning a business in another country as a part of the existing business in one country. Foreign companies invest in business ventures in India to avail cheap wage labour, tax exemption and other financial gains that they get here. It has helped in economic development of India by adding jobs and resources.
FDI is a much debated topic and one of interviewer's favourite for group discussion. Here we get some facts, quotes, arguments and possible GD topics to help deal with a
Group Discussion on FDI.
Some interesting facts you can use in a GD on FDI:
- From the records of Department of Industrial Policy and Promotion (DIPP), it is estimated that the total FDI in India during April-September 2017 stood at US$ 33.75 billion. This shows that government's effort towards ease of doing business and relaxing FDI norms has been useful.
- The three sectors to receive highest FDI equity inflow were Telecom, Computer software and hardware & Services. The recorded inflow in each of the sectors was US$ 6.08 billion, US$ 3.05 billion and US$ 2.92 billion respectively.
- The highest equity inflow in India was from Mauritius (US$ 11.47 billion), Singapore (US$ 5.29 billion), Netherlands (US$ 1.95 billion), USA (US$ 1.33 billion) and Germany (US$ 934 million).
- Mr Anil Sinha, Global Impact Investing Network's (GIIN) advisor for South Asia, predicts that Indian investments may grow 25 per cent annually from US$ 4 billion to US$ 40 billion by 2025.
- The Government has plans of scrapping the Foreign Investment Promotion Board (FIPB). This will further improve the ease of doing business in the country.
- The World Bank has predicted that private investments in India are likely to grow by 8.8 % in FY 2018-19.
Group discussion topics on FDI:
1. FDI in India - boon or bane?
2. Should Govt. of India allow 100 % FDI in cash and ATM management companies?
3. Should FDI norms be further relaxed in India to attract more investments?
4. FDI in retail is good for the Indian economy - Agree or Disagree.
5. FDI and Make in India are antonymous to each other.
6. FDI in pension fund sector - Advantages and Disadvantages.
7. Pros and Cons of FDI in health sector.
8. Advantages and Disadvantages of FDI in higher education
9. Will rising FDI lead to stabilising rupee?
10. Why is the rise in FDI unable to raise GDP and open jobs in India?
11. FDI in education is good for India.
12. Rise in unemployment and FDI - How are they related?
13. Are foreign rating industries unfair to India?
14. FDI is harming the domestic Indian market
15. Impacts of Brexit on FDI.
16. Why did FDI grow despite demonetisation and fall of GDP?
17. FDI is slowly leading towards virtual enslavement of our country - agree or disagree?
A quote that can be used in a GD on FDI:
"I've never believed protectionism of that kind will lead us anywhere. I think you can have certain specific rules for engaging with India. For example, not allowing mineral resources to be taken out of the country.. But there is not a shred of doubt in my mind that when you open an economy you should do it in totality. Foreign investment adds a sense of competition; we should see this as a wake-up call to modernise and upgrade. Companies that do not will undoubtedly die."
- Ratan Tata
Pros of FDI:
1. Manufacturing: Industrial development and making own products instead of getting them imported is big advantage.
2. Employment: New industries and startups create job and employment is raised which benefits the host nation.
3. Better products: There is competition in the market and hence manufacturers are forced to create better products to boost sale.
4. Better technology: Foreign companies make use of more advanced technology which gets introduced in India.
5. Strengthen rupee: With pouring of foreign currency in the nation, the value of rupee is strengthened.
6. Consumers benefit: With FDI increases competition for domestic companies forcing them to improve their products and services.
Cons of FDI:
1. Economic enslavement: They are notorious of exploiting the labourers which may lead to economic colonialism.
2. Takeovers: Local owners losing their shares to the foreign entity may lead to complete takeover and ownership going to the foreign entity.
3. Biased competition: Local companies are unable to compete with the products and marketing strategies of foreign companies which leads to the downfall of indigenous companies.
4. Regardless of the natural resources: They are usually looking for host nations where environmental laws are not very stringent and they can get away with polluting the local river bodies, land, air etc.
5. Concentration in one area: Since they are all about profit making, they are usually concentrated around areas where development is on the go.
Conclusion:
FDI is helpful for the economic and industrial development of India. The drawbacks can be handled with better regulations.
We hope that you found this
GD guide on FDI helpful in forming an opinion and dealing with a topic on this subject.
