AN UPDATES OF ISSUES, CHALLENGES AND OPPORTUNITIES IN FDI IN INDIA
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Keywords:
Challenges and Opportunities, Liberalization, Financial Reforms, Foreign Direct InvestmentAbstract
In the beginning of liberalization when India was facing the financial crises for meeting the external commitments. At one time during the Prime minister Chandra Sakher government India had to pledge its gold before World Bank to repay the foreign debts as India had only $ 1 billion foreign exchange reserves, at the same time, the immediate external payment was more than $ 25 billion. Therefore India was bound to opt for liberal economic policy for the inflow and outflow of foreign investment and depreciation of Indian rupees by 300% in comparison of dollar from rupees 8 to rupees 28 per dollar. By which the foreign investors started attracted and investing their funds in India as the India had and has potential for the growth and diversification of business, since then the India has made remarkable progress in the field of foreign direct Investment but there are lot many challenges and issues needs to be resolve to promote and attract foreign direct investment. These issues and challenges are as mentioned in the papers are-Restrictive FDI regime, Lack of clear cut and transparent sectoral policies for FDI, High tariff rates by international standards, Lack of decision-making authority with the state governments, Limited scale of export processing zones, No liberalization in exit barriers, Stringent labour laws, Financial sector reforms, High corporate tax rates, Fluctuating Exchange rates, Indecisive Government and political Instability. In this paper we have tried to update the latest and the possible conclusion for the rationalization of foreign direct investment.
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