Outward FDI from India: Review of policy and Emerging Trends.

Abstract

In the previous half-century, the legislative framework controlling India's direct Foreign investment has changed dramatically. The goal of this article is to chart the evolution of OFDI policies since the 1960s. It also tries to highlight important patterns in India's foreign direct investment over the last ten years. The removal of the blanket ceiling on outward foreign direct investment and the linkage of outward investment to an investor's net worth has resulted in a significant increase in external investment from India. The growing importance of services in OFDI from India is characterised by the fact that it has surpassed industry as the leading source of OFDI. Emerging economies are the most prominent consumers of OFDI assistance. As recipient economies, developing nations outperform advanced economies in services having varying forms of knowledge complexity - knowledge based services and less project based services. Yet, in the manufacturing industries, there is a definite difference on destinations dependent upon whether investors seem to be from rising or intermediate manufacturing. The majority of Direct investment from rising manufacturing is meant for advanced nations, whereas OFDI from medium - sized businesses is primarily aimed at underdeveloped nations.