At the outset, the paper dwells on the ambiguities surrounding the definition and the non‐adherence of
international norms in measuring the FDI inflows. The study finds that portfolio investors and round-tripping
investments have been important contributors to India’s reported FDI inflows thus blurring the distinction between direct and portfolio investors on one hand and foreign and domestic investors on the other. These investors were also the ones which have exploited the tax haven route most. These observations acquire added significance in the context of the substantial fall in the inflows seen during 2010‐11.
...
FDI that is dominated by financial investments, though a little more stable than the portfolio investments through the stock market, cannot deliver the perceived advantages of FDI. The net result is that while much of the FDI cannot enhance India’s ability to earn foreign exchange through exports of goods and services and thus cover the current account gap on its own strength, large inflows of portfolio capital causes currency appreciation and erodes the competitiveness of domestic players. The falling share of manufacturing and even of IT and ITES means that there is less likelihood of FDI directly contributing to export earnings. India seems to have been caught in a trap wherein large inflows are regularly required in order to finance the current account deficit.
...
Even at the global level, the developmental impact of FDI is being given lesser importance notwithstanding the repeated assertions to the contrary in some fora. International data on FDI and its impact has never been unambiguous. If FDI has to deliver, it has to be defined precisely and chosen with care instead of treating it as generic capital flow. India should strengthen its information base that will allow a proper assessment of the impact that FDI can make on its development aspirations.
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India's FDI Inflows: Trends and Concepts
February 2011, Institute for Studies in Industrial Development
Working paper
in English
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India's FDI inflows: trends and concepts
2011, Research and Information System for Developing Countries, Institute for Studies in Industrial Development
in English
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Book Details
Table of Contents
CONTENTS
Abstract.
1
1.
Introduction
Page 2
2.
Conceptual and Definitional Issues
Page 6
2.1.
10% Threshold and Significant Influence vs. Control
Page 11
2.2.
Need for Case‐by‐Case Approach
Page 15
2.3.
Round‐Tripping
Page 18
2.4.
Indian Practice
Page 19
3.
Analysis of Inflows
Page 22
3.1.
The Aggregates
Page 22
3.2.
Analysis of Individual Inflows
Page 30
3.3.
Other Aspects
Page 42
3.4.
Private Equity and Venture Capital
Page 47
4.
Summary and Concluding Observations
Page 52
4.1.
Measurement and Classification (Direct or Portfolio?)
Page 56
4.2.
A Case for Selective Approach towards FDI
Page 60
4.3.
Need for a Relevant Data System
Page 66
Edition Notes
Contributors
The Physical Object
ID Numbers
Excerpts
added by K S Chalapati Rao.
Abstract
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- Created March 27, 2011
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September 8, 2012 | Edited by VacuumBot | Updated format 'Working Paper' to 'Working paper' |
March 27, 2011 | Edited by K S Chalapati Rao | Edited without comment. |
March 27, 2011 | Edited by K S Chalapati Rao | Edited without comment. |
March 27, 2011 | Edited by K S Chalapati Rao | Added new cover |
March 27, 2011 | Created by K S Chalapati Rao | Added new book. |