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Points to be known :-
- Full form of FDI is 'Foreign Direct Investment'.
- FDI can be defined as 'one company can invest on physical means such as lands, factories and mines in another company of another country to acquire lasting management interest'.
- The host company and the company, which is investing together form a 'multinational corporation' (MNC).
- Through FDI, the company, which invests will have control over the host company.
- Though at present only 53 cities with population not less than 10 lakh in the country have been identified for FDI As the fourth-largest economy in the world in PPP terms, India is a preferred destination for FDI. During 2010, the country attracted $178 billion as FDI.
- More details can be found here http://en.wikipedia.org/wiki/Foreign_direct_investment
- FDI helps in the economic development of the host country (where the investment is being made).
- For origin and host countries, FDI provides access to new technologies, products, skills and organizational and management strategies.
- Employment increases in the host country.
- Origin country (the country which makes the investment) also develops economically.
- Competition increases. So that, with the competitive spirit, every company improves to its best.
- Through FDI in production companies, price reduction is possible.
- FDI is a boon for the small companies to become more actively involved in international business activities.
- Agriculture related people get good price for their goods as middle men will be eliminated.
- With the FDI in retail sector, small companies and merchants will suffer a lot.
- Inflation (the rise in prices over a period of time) may be increased.
- Technological dependence on foreign technology sources.
Government is taking this decision in good faith.Few persons and lobbies controlling the rates of food commodities in India.And bringing more competition in market will bring better prices for buyers as well as sellers of commodities. Parties protesting against FDIs in retail have choice to not allow FDIs in the states they are ruling.Government should make a regulatory body for the commodity trade as we have for cellular services.
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