Microeconomics Case Study

Business Confidence for FDI in India

OR

Abstract:
India, with the second largest population in the world, offers huge business opportunities for investors. The 'protectionist' government policies held back the pace of economic growth of the country until the true economic reforms started in 1991. Although Indian foreign direct investment (FDI) increased from $129 million in 1991-1992 to $3,449 million in 2001-2002, it did not match the FDI growth rate of other developing nations, especially China.

Pedagogical Objectives:

• To discuss the major factors affecting FDI inflows into India until 2003
• To discuss how the policy reforms in India had started to build up confidence among foreign investors.

Keywords : Government and Business Environment Case Study, Foreign direct investment (FDI) in India, Gross domestic product (GDP) of India, Balance of payments, Foreign investment promotion board, Foreign currency reserves, FDI inflows, Exports and imports, Business Environment Case Study, AT Kearney FDI confidence index, Developing nations, Special economic zones, Federation of Chambers of Commerce and Industry, Reforms, External commercial borrowings, Income Tax Act, Reserve Bank of India