ABSTRACT
It is well known that foreign direct investment (FDI) can complement local development efforts in several ways. These include boosting export competitiveness; generating employment opportunities and strengthening the skills base; enhancing technological capabilities (transfer, diffusion and generation of technology); and increasing financial resources for development. It can also help ‘plug’ a country in the international trading system as well as promote a more competitive business environment (see Chapter 6 of this book). In view of this, India has joined the global bandwagon to attract FDI by taking steps to ensure an enabling business environment to improve the country’s attractiveness as an investment destination and a global manufacturing hub. The investment climate in India has undoubtedly become friendlier over the years, and investing in India has been projected as a much more attractive proposition today than in yester-years (particularly pre-1991, when India was still a heavily regulated economy).
