Subrata Roy’s Sahara India recently took the tabloids by storm when it announced investment from two foreign investors for its city development and real estate verticals. People rejoiced with the hopes of Sahara India’s grand comeback, and even Roy took the opportunity to pen down a heartfelt letter to the investors, proclaiming that all problems will come to an end this year.
Sahara India is just one of the many examples of how foreign investment is propelling Indian industries towards a brighter future. With the government approving liberalization of Foreign Direct Investment (FDI) rules in some sectors, the economic growth of the country is expected to come back on the track within a few months.
FDI is not only a solution to the country’s plummeting economic growth; it is also a way to enhance India’s global standing on the basis of ease of doing business. A record foreign investment inflow has enthused the government to make the nation one of the world’s favourite FDI destinations in 2020.
Foreign investments in Indian industries, particularly FDI, bear numerous advantages for the country’s economy. While increased job opportunities and human resource development are some of the most obvious pros of the arrangement, there exists a long list of ways in which FDI is leading Indian industries towards a brighter future.
As an added advantage of FDI, recipient businesses are gaining access to the latest financing technologies, tools, and operational practices from across the world. The introduction of newer, enhanced processes and technology can, over time, result in their diffusion into the Indian economy. This would, in turn, lead to enhanced efficiency of the recipient industry.
FDI is also creating a competitive market in India. By facilitating the entry of foreign organisations into the domestic marketplace, FDI is helping break domestic monopolies while creating a healthy competition. This not only provides consumers with an access to a wider range of products; it also pushes the local firms to innovate by enhancing their processes and product/service offerings.
As the new fiscal year approaches, Indian industries are expecting a growth spurt with the help of increased foreign investment in various sectors. How this fares for the country’s economy is something yet to be determined.