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Fdi

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Sukanta Pal
Sukanta Pal

Foreign direct investment (FDI) occurs when an individual or company in one country makes a direct investment into business operations in another country. There are several types of FDI including horizontal FDI which duplicates home country activities abroad, platform FDI which uses a destination country to export to a third country, and vertical FDI which moves production to different stages of the supply chain across countries. India has allowed 75-100% foreign investment in its telecom sector in order to attract an estimated $10 billion of fresh funds that can help lower financial burdens for telecom companies and the industry. However, foreign telecom companies may still be hesitant to enter due to risks of corruption, regressive policy changes being overturned in courts,

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Fdi
WHAT IS FDI Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country.
TYPE OF FDI Horizontal FDI arises when a firm duplicates its home country-based activities at the same value chain stage in a host country through FDI. Platform FDI Foreign direct investment from a source country into a destination country for the purpose of exporting to a third country. Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chains
INDIA has allowed 75% to 100% foreign direct investment in telecom. At a meeting held by the ministry of commerce and industry, chaired by the prime minister, there was agreement on allowing 100% FDI in BASIC and CIRCULAR SERVICES, of which 49% FDI is allowed through the automatic route.
TELECOM COMPANIES Telecom majors RELIANCE communication , Russian conglomerate controlled Sistema controlled SSTL, Malaysion firms maxis controlled AIRCEL .
TELECOM ANALYSTS Industry idea behind increasing the FDI limit in the telecom sector is to help the industry get fresh funds to lower financial burden. In 2012, there have been disputes among foreign investors with their India patners in firms like UNINOR and ETISALAT DB. Industry analysts belive 100% FDI in the telecom sector can attract investment of USD 10 billion in near to longterm.
WHY FOREIGN TELCO MAY STILL NOT ENTER ? Corruption and policy not holding up in court. Eg>The 2G scam, where in the telecom ministery , at the time led by A.RAJA allocated license along with spectrum under the first come first basis. BUT more pertinently , shifted the dates. Regressive policies Eg> the VODAFONE tax case . where in laws were changed to apply tax retrospectively.
Aggressive Regulatory Action Eg> 3G roaming pacts have been under scrutiny .The Government recently sent a demand notice to AIRTEL with a Rs. 650 crore fine for subscriber local dialling between 2002 and 2005.
TELECOM IN VODAFONE Vodafone headquarters in the UK is INDIAs second biggest telecom operator . The company has operations in 30 countries. The DIPP had put out a dissensions paper on relevance of FDI caps in different sectors. Vodafone which had a JU with the ESSAR group saw a sour in phase over valuations. The RUIAS owned ESSAR group has since Exited.
Fdi

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Fdi

  • 2. WHAT IS FDI Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country.
  • 3. TYPE OF FDI Horizontal FDI arises when a firm duplicates its home country-based activities at the same value chain stage in a host country through FDI. Platform FDI Foreign direct investment from a source country into a destination country for the purpose of exporting to a third country. Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chains
  • 4. INDIA has allowed 75% to 100% foreign direct investment in telecom. At a meeting held by the ministry of commerce and industry, chaired by the prime minister, there was agreement on allowing 100% FDI in BASIC and CIRCULAR SERVICES, of which 49% FDI is allowed through the automatic route.
  • 5. TELECOM COMPANIES Telecom majors RELIANCE communication , Russian conglomerate controlled Sistema controlled SSTL, Malaysion firms maxis controlled AIRCEL .
  • 6. TELECOM ANALYSTS Industry idea behind increasing the FDI limit in the telecom sector is to help the industry get fresh funds to lower financial burden. In 2012, there have been disputes among foreign investors with their India patners in firms like UNINOR and ETISALAT DB. Industry analysts belive 100% FDI in the telecom sector can attract investment of USD 10 billion in near to longterm.
  • 7. WHY FOREIGN TELCO MAY STILL NOT ENTER ? Corruption and policy not holding up in court. Eg>The 2G scam, where in the telecom ministery , at the time led by A.RAJA allocated license along with spectrum under the first come first basis. BUT more pertinently , shifted the dates. Regressive policies Eg> the VODAFONE tax case . where in laws were changed to apply tax retrospectively.
  • 8. Aggressive Regulatory Action Eg> 3G roaming pacts have been under scrutiny .The Government recently sent a demand notice to AIRTEL with a Rs. 650 crore fine for subscriber local dialling between 2002 and 2005.
  • 9. TELECOM IN VODAFONE Vodafone headquarters in the UK is INDIAs second biggest telecom operator . The company has operations in 30 countries. The DIPP had put out a dissensions paper on relevance of FDI caps in different sectors. Vodafone which had a JU with the ESSAR group saw a sour in phase over valuations. The RUIAS owned ESSAR group has since Exited.