- FDI is perhaps the key source that can mitigate any developing nations’ current account deficit, inflation and currency valuations.
- FDI creates jobs: Half of our population is under the age of 25, and 60 per cent is under the age of 30. Where are they going to work, if you don't set up manufacturing units? A total of 255,416 new Indian jobs ware created in 2011 alone by FDI.
- It transforms the local economy into
an export led zero capital cost. FDI also brings with it expertise which
is as much important as the capital itself. Since, it is the multinationals,
which are at the leading edge of the FDI lead exports, they ensure free access
to global markets.
- For example Suzuki Motors FDI not only a
thriving domestic auto industry in India; it also created a whole eco system of
SME ancillary auto component manufacturers. India’s auto component exports
stands at over $4.5 billion today. In addition the MNC auto makes exported close to 3
million finished vehicles in FY 2011-12. What stated with a single FDI made India
a global auto hub.
- As the exports grow, the nations brand popularity grows. The consumer nations start to trust the quality and reliability of the supply. This gives continuity to the economic growth by attracting newer players.
For more on FDI in India and it's impact; please refer Ernst & Young's India Attractiveness Survey & Fact Sheet on FDI
"Retail Realities" - Watch video from min 2.45 onwards.
The critics should also keep a broader picture in mind. Yes it’s true that with FDI in retail, the middle man and mom & pop stores will lose jobs; but on the other side hundreds of thousands of new jobs will be created in other places. The consumers will benefit from lower prices through economies of scale and farmers will get better prices as the middle man gets eliminated. The problem of a small section getting unemployed can be addressed by training and re-skilling.
Issue is FDI done right. Check this video for fine print of our Retail FDI Policy
And continue the debate on the attached resource
- Chinese foreign invested enterprises account for over half of China's exports and imports; they provide for 30% of Chinese industrial output, and generate 22% of industrial profits while employing only 10% of labor – because of their high productivity.
- China continuously evolved its FDI policy in line with the economic growth. Initially it allowed FDI only in costal cities or Special Economic Zones with clear focus on manufacturing led export growth. Subsequently in the process on ongoing reforms it withdrew geographic restrictions and opened up the services sector to FDI. This gradual approach allowed China to synchronize FDI with development of institutional and regulatory capacity.
- China strictly follows a policy to maximize its
own national interest by accepting beneficial inputs, while restricting those,
which may have an unfavorable impact; like resulting in the monopolization of
the market or obstructions to the development of national industry.
- GDP Growth of over 10% for last two decades, over 200 million people pulled out of poverty and huge investment in infrastructure are things impacted by FDI in China.