12final project

8/9/2019 12final Project

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ACKNOWLEDGEMENT

A journey is easier when you travel together. This project report is the result of twomonths of work whereby, we accompanied and supported by many people. We

would like to extend our gratitude to Mr. Mandeep ayer who kindly accepted to

guide us in the project. We are thankful to him for spending his valuable hours to

review and analy!e our project at every stage and suggested necessary changes.

We feel our self extremely fortunate to have had the opportunity of associating our

self with him. is constant encouragement and positive words were greatly

instrumental in making this work a success.

"or most, we would like to thank #od for is grace and blessings. $ast but not the

least % would like to thanks my parents and family members for their affection and

inspiration all the time.


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Introduction:

Foreign direct investment(FDI) is direct investment into production in a country

by a company in another country, either by buying a company in the target country

or by expanding operations of an existing business in that country. Foreign direct

investment is done for many reasons including to take advantage of cheaper wages,

and/or for special investment privileges such as tax exemptions offered by the

country as an incentive to gain tariff-free access to the markets of the country or

the region. Foreign direct investment is in contrast to portfolio investment which is

a passive investment in the securities of another country such as stocks and bonds.

nward and outward direct investment (F!) stocks and flows tend to go together,

across countries and over time. "he countries that invest extensively abroad are

usually also large recipients of F!. "here is little evidence that flows of F! are a

ma#or influence on capital formation.

$ne of the advantages of foreign direct investment is that it helps in the economicdevelopment of the particular country where the investment is being made.

%ut as we all know every coin has two sides, same way F! do possess pros and

cons to a country. t can be seen when &' approval is proposed by ndian

government a debate in parliament is held which is concluded below

Favor:

"his will bring a modern technology to a country

mprove rural infrastructure

*elp create competitive market +educe wastage of agricultural produce

nable our farmers to get better price for their #obs

onsumer will get low price commodity


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%iggest beneficiary will be small farmers, who would be able to improve

productivity and realie higher remuneration by selling directly to large

organied players and shorten the chain from farm to consumers

overnment too stands to gain by this move through more transparent and

accountable monitoring of goods and supply chain management systems. t can

expect to receive an additional 0123&-45 billion by way of taxes

Against:

$ur interest rates today are as high as '6 to '7 how do we compete with the

economies which have a 6 interest rate. $ur infrastructure our trade

facilitations our labor laws, all these factors collectively don8t make ndia low

cost. 1o do you want ndia to become a center where we allow foreign

companies to come in and set up these large chains which eventually instead ofselling domestic products outsourcing internationally the cheapest sources and

selling those products. 9lease remember the domestic retail normally sources

domestically, international retail sources internationally because the source

from the cheapest sources.

ven if big retail companies help the farmers in resurrecting their economy,

what plan does the government has for millions of middlemen who are part of

the business process chain that ensures manufactured products reach end users.

:e engage millions of uneducated and semi educated people of various stagesof retail business spread across towns and cities but we are afraid that "esco and

:al-;art will only engage smart and educated work force in small strength,

comparatively.

Conclusion:

overnment is taking decision in good faith. Few persons and lobbies controlling

the rates of food commodities in ndia.


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FDI in India

FDI in retail

FDI in setting-upAgri suppy chaincom

parisionof

prices

O!ectives o" #ro!ect

'. omparison of vegetable prices in modern versus traditional3. %enefits to farmer of high prices4. %enefits to consumer of low prices


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FDI in India

$ene"its o" FDI to a countr%

One of the advantages of foreign direct investment is that

it helps in the economic development of the particular countrywhere the investment is being made.

"his is especially applicable for developing economies. !uring the '==5s, foreign

direct investment was one of the ma#or external sources of financing for most

countries that were growing economically. t has also been noted that foreign direct

investment has helped several countries when they faced economic hardship.


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FDI in 'etail


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(ros and cons o" FDI in retail

'eal ene"its o" retail FDI are limited:"he political fallout of the government8s

decision to increase the F! limit in the retail sector continues. Aet !eep

;ukher#ee, !irector, ndia +atings and +esearch, a unit of Fitch +atings, believes

that the real benefit of retail F! is limited. :hile the measures may benefit the

sector and the economy in the long run, ndia +atings believes that the near term

impact is limited. ndia +atings also says that it expects ndian retailers to re-

organie business operations along geographical lines in order to take advantage of

the new rules

Farmers) consumers *ill ene"it "rom #olic% re"orms:"he bold policy moves

made by the government are in the interest of farmers, manufacturers, consumers,

everybody. feel that ndia is back on the move said +a#an ;ittal. ?arge

investments will pour in and huge employment opportunities can be expected.


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+a#an ;ittal, Bice-hairman and ;anaging !irector of %harti nterprises, speaks

exclusively to C!"B on how the policy measures unleashed by the government

would plan out.

Comparison of impact of FDI in India and other Countries

Following key observations could be made from the comparison of F! and othercountries (hina, %rail, hile,


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n terms of the indicator Darbitrating commercial disputesE ndia is on par

with %rail and +ussian federation. . Wal&Mart's attempt to apply the company8s proven 01

success formulain an unmodified manner to the erman market, however, turned

out to be nothingshort of a fiasco. 0pon closer inspection, the circumstances of

the company8s failure toestablish itself in ermany give reason to believe that it

pursued a fundamentallyflawed internationaliation strategy due to an incredible

degree of ignorance of thespecific features of the extremely competitive erman

retail market. ;oreover, insteadof attracting consumers with an innovative

approach to retailing, as it has done in the01


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'evie* o" Literature

"he review of past studies helps us in framing ob#ectives, developing research

design, variable selection, interpreting the results and in drawing meaningful

conclusions. n accordance with the ob#ectives of the study, a brief review of

literature is presented here under the following headings.

'. Foreign Direct Investment Flo*s to India

!uring the recent global crises F! inflows to ndia did not show as muchmoderation as was the case at the global level. *owever, when the global F!

flows to ;s recovered during 35'5-35'', F! flows to ndia remains sluggish

despite relatively better domestic economic performance ahead of global recovery.

+, T-e Agri Millionaires: A ne* generation o" "armer entre#reneurs is on t-e rise

. and it means usiness

ndia produces nearly '' per cent of the world8s vegetables and '& per cent of all

fruits. "he country is the largest producer of mangoes, bananas and pomegranates,

globally, though its share in the international trade of fruits and vegetables

remains a meagre ' per cent.. ndian farmers are mostly small and marginal with

fragmented landholdings.


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/, T-e Devil in t-e 'etail

;an ;ohan 1ingh8s decision to open up the fast-growing organied multi-brandretail sector to F! will be one of the biggest game-changing reforms that will

touch everyone8s life farmers, industries, traders, retailers, #ob-seekers and, not

the least, millions of consumers. "his change may take years, even decades, to

play out to its full potential

0, Oama1s FDI remar2 dra*s s-ar# criticism "rom Government) O##osition

Barack Obamas statement that the investment climate in India is

!deteriorating! seems to have politically united India and raised

hackles across party lines. On "witter# the $rime %inisters O&ce

'$%O( pointed out that according to a recent )*+"AD report#

India is the third most desirable destination for Foreign Direct

Investment 'FDI(. !FDI in,ows to outh Asia turned around as a

result of higher in,ows to India# the dominant FDI recipient in the

region. "he two large emerging economies# +hina and India# saw

in,ows rise by nearly per cent and by /0 per cent#

respectively#! the $%O tweeted.


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&.'eal ene"its o" retail FDI are limited: India 'atings

"he political fallout of the government8s decision to increase the F! limit in the

retail sector continues. Aet !eep ;ukher#ee, !irector, ndia +atings and +esearch,

a unit of Fitch +atings, believes that the real benefit of retail F! is limited. :hile

the measures may benefit the sector and the economy in the long run, ndia +atings

believes that the near term impact is limited. ndia +atings also says that it expects

ndian retailers to re-organie business operations along geographical lines in order

to take advantage of the new rules

7.Farmers) consumers *ill also ene"it "rom #olic% re"orms: 'a!an Mittal

"he bold policy moves made by the government are in the

interest of farmers# manufacturers# consumers# everybody. I feel

that India is back on the move. 1arge investments will pour in and

huge employment opportunities can be e2pected. 3a4an %ittal#

5ice-+hairman and %anaging Director of Bharti 6nterprises#

speaks e2clusively to *D"5 on how the policy measures

unleashed by the government would pan out.

3, India is not -ostile to FDI "lo*s) sa%s Niles- 4-a-

In a discussion with *D"5 $ro7t# A2is Directs*ilesh hah shares

his views on how the Indian economy is going to perform ahead.

!"he economic growth is under pressure. 8owever# India is nothostile to FDI ,ows. FII ,ows may resume once concerns over

9AA3 are over#! he said. 8e feels that the rupee will depreciate

further.


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.FDI in retail *ill ring investment o" 5 366 million: Nara%anasam%

Defending FDI in retail and other sectors# )nion %inister 5

*arayanasamy on %onday said the country was e2pecting an

investment of about :;


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!ata from retailers, farmers, distributors, shopkeepers from

different states.

$pinions of retailers, farmers and shopkeepers

9olitical data from media and newspapers

Boice of the people

Data anal%sis:

omparison of prices of vegetables within and outside states

!ebates

1urveys

A##endi&:


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Bibliography

*D"5. '=uly 0?(. NDTV Business. 3etrieved from www.ndtv.com@

[email protected]

criticism-from-government-opposition=/C/?

$utlook. +etrieved from www.outlookindia.com

http//www.outlookindia.com/article.aspxG3>='@>

*D"5. '=

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