REVIEW OF OUTWARD FOREIGN DIRECT INVESTMENT FROM INDIA POST LIBERALIZATION

The transformation of Indian economy from being a perennial receptor of inward FDI to outward FDI has happened in a very short time frame. The trajectory taken in terms of nature and direction of OFDI from India is quite different from the historical nature of OFDI globally and stands in stark contr...

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Published inAmerican journal of business research (Cary, N.C.) Vol. 7; no. 1; p. 19
Main Authors Chandrawanshi, Anand Gaurav, Banerji, Amit
Format Journal Article
LanguageEnglish
Published Cary American Institute of Higher Education 01.11.2014
Subjects
Comparative analysis
Economic growth
Economic reform
Emerging markets
Foreign investment
Growth rate
Information technology
Liberalization
Portfolio investments
Public sector
Studies
India
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Summary:The transformation of Indian economy from being a perennial receptor of inward FDI to outward FDI has happened in a very short time frame. The trajectory taken in terms of nature and direction of OFDI from India is quite different from the historical nature of OFDI globally and stands in stark contrast to its Asian neighbor China. Indian OFDI has focused more on intangible gains in secondary and tertiary sectors rather primary sectors, presumably because in India, Public Sector Undertakings (PSUs) dominate minerals and ore segments. India is one of the two developing countries to be a major OFDI home country and today in spite of everything has become a net OFDI country. The paper reviews Classification of Foreign Investment and FDI, general enabling conditions for FDI, followed by review of outward FDI from India. There seems to be a causal relationship in OFDI in pharmaceutical and information technology sectors. The Indian OFDI followed a more labored approach, with immigration of high skilled persons in developed countries and then their migration to entrepreneurship. Also in spite of structural infirmities and lack of industrial base, there existed pockets of excellence, which were globally competitive. Another driver of OFDI was the entry of foreign products with lowered imported duties, which forced Indian companies to look abroad. It is a matter of time before Indian firms diversify and compete with China for natural resources. Limitation of this research was on account of limited access to literature sources. Comparative study with emerging markets also was not possible on account of word limits.
ISSN:1934-6484