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INFLUENCE OF FOREIGN INVESTMENTS ON THE INDIAN

ECONOMY

-Manav Chandan

As Susan George once stated, “If the economic balance. Since the economy is at

economy becomes disembodied from such ease, it grabs attention of the global

society it can only lead to a disaster.” Our investors that view the nation as the ‘ideal’

market is substantially dominated by the place for business, considerable for setting

foreign companies and/or investments that up factories, shops, etc.

has affected the economy in great measure.

Apart from the economic perspective,

The customary question ‘Why India?’ foreign investments also help socially and

●Well, it’s the largest democracy in the culturally. Since the market becomes

world with political stability. competitive, companies improvise by

●Being the second largest emerging putting their capital into social projects and

market after the US, India has a skilled merit goods like schools, hospitals, training

and competitive labor force. programs, etc. This also increases job
employment giving the employees a great
●It has the highest rates of return on

investment platform to enhance their skills.

●Lists 6,500 companies on the Bombay

Stock exchange; only the NYSE has The key reasons for Indian companies to

more. engage in outward Foreign Direct

Investment (FDI) are-

Primarily, counting since the year 1991, ★Market related factors- since enormous
when India opened its gates to the whole
number of companies are looking for a

world to enter and make the best out of it, niche market, especially the IT-sector

the government liberalized our economy. finds an arising market abroad.

This not only helped domestic but also ★Companies realise that they operate in a

international businesses to advance as well. global economy and not in a domestic

Foreign investment companies aim directly one. Therefore specialisation from

at developing nations like India, Indonesia, abroad is used to improve the way of

Turkey, etc for economic growth and doing business of the company.