Overview
First
of all, FDI means Foreign Direct Investment which is mainly
dealings with monetary matters and using this way they acquires standalone
position in the Indian economy. Their policy is very simple to remove rivals.
In beginning days they sell products at low price so other competitor shut down
in few months. And then companies like Wall-Mart will increase prices than
actual product price.
They
are focusing on national and international economic concerns. There are four
main working pillars of FDI. They are financial collaborations, technical
collaborations and joint ventures, capital markets via Euro issues, and private
placements or preferential allotments.
There
are two types of FDI, one is inward FDI and second is outward
FDI. Ongoing news suggests that largest retailer Wal-Mart has demanded for
51% of international dealings in FDI in Indian markets which had called
nationwide strike. From positive and negative aspects FDI has its own
advantages and disadvantages.
Advantages
- Increase economic growth by dealing with
different international products
- 1 million (1 Crore) employment will create in
three years - UPA Government
- Billion dollars will be invested in Indian
market
- Spread import and export business in different
countries
- Agriculture related people will get good price
of their goods
Disadvantages
- Will affect 50 million merchants in India
- Profit distribution, investment ratios are not
fixed
- An economically backward class person suffers
from price raise
- Retailer faces loss in business
- Market places are situated too far which
increases traveling expenses
- Workers safety and policies are not mentioned
clearly
- Inflation may be increased
- Again India become slaves because of FDI in
retail sector
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