Fdi in Retail Essay

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Question: Tell me how FDI would influence the Economy in a simple language as I am new to Economics Please. Suppose Foreign Direct Investment (FDI) is allowed in multi-brand retail sector then Wall mart can come to India and start a big mall in every city. • So lot of labourers, contractors, cement suppliers, masons, electricians etc get work for mall-construction. • After mall starts running: people get jobs as salesmen, accountant, manager, security guard and sweeper in it. • Since competition increases, consumers get more choices and attractive price offers by competing malls & small vendors. • All these people who got job because of this mall, now they’ve money in their hands so they go take home and bike loans, so it increases the demand and thus people in those automobile-real estate sectors also get more orders. new houses are built so more laborers get jobs and that goes on and on… FDI can be defined as a cross border investment, where foreign assets are invested into the organizations of the domestic market excluding the investment in stock. It brings private funds from overseas into products or services. The domestic company in which foreign currency is invested is usually being controlled by the investing foreign company. Eg. An American company taking major stake in a company in India. Their ROI is based on the performance of the project. In the past decades, FDI was concerned only with highly industrialized countries. US was the worlds largest recipient of FDI during 2006 with an investment of 184 million from OECD (Organization for Economic Co-operation and Development) countries. France, Greece, Iceland, Poland, Slovak Republic, Switzerland and Turkey also have a positive record in FDI investments. Now, during the course of time, FDI has become a vital part in every country more particularly with the developing countries. This is because of

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