FDI: India vs China



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Code : ITF0008

Year :
2004

Industry : General Business

Region : :India China

Teaching Note: Available

Structured Assignment : Not Available

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Abstract: Though India and China enjoy many similarities, China has surged ahead of India in terms of economic progress. While India's per capita income is $440 China's per capita income stood at $990. In China, 3% of the population is below the poverty line and in India it is 30-40%. China opened up its economy before India and could therefore attract foreign investment which helped it to emerge as a 'workshop of the world'. Though India is trying to catch up with China in terms of foreign direct investment (FDI), China is way ahead. China received FDI of $52.7 billion in 2002 where as in the case of India, the figure stood at $4.67 billion. Since the opening up of the economy in 1978, China enjoyed a steady flow of FDI.

Pedagogical Objectives:

  • To discuss how the Chinese government played a proactive role in encouraging the foreign investments and at the same time protecting the local companies
  • To discuss the differences in approaches that both the countries are adopting to attract FDI and how India can catch up.
    Keywords :Foreign direct investment (FDI), India and China, Role of government, Fiscal Policy Case Study, Special economic zones, Business environment, Red tape, Infrastructure

    Contents :
    » BACKGROUND NOTE
    » ENCOURAGING FDI – THE CHINESE WAY
    » THE INDIAN SCENARIO
    » DEEPER REASONS


    Case Introduction >>


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