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    1. Introduction Foreign direct investment (FDI) is defined as a long-term investment by a foreign direct investor in an enterprise resident in an economy other than that in which the foreign direct investor is based. Foreign direct investment (FDI) is also defined as investment made to acquire lasting interest in enterprises operating outside of the economy of the investor. The FDI relationship consists of a par-ent enterprise and a foreign affiliate which together form a Multinational corporation (MNC). In order to qualify as FDI the investment must afford the parent enterprise control over its foreign af-filiate. The UN defines control in this case as owning 10% or more of the ordinary shares or voting  power of an incorporated firm or its equivalent for an unincorporated firm; lower ownership shares are known as portfolio investment. Foreign Direct Investment (FDI) flows have increased dramatically in last few decades. As devel-oping countries, particularly in Asia, remove restrictions and implement policies to attract FDI in-flows, trade and investment have become increasingly intertwined. As such, there have been grow-ing calls for a multilateral framework of foreign investment rules to be negotiated under the auspi-ces of the World Trade Organization (WTO). This paper reviews developments in FDI flows and their impacts in developing Asia, and the importance of the policy context in which those flows oc-cur. It discusses advantages and disadvantages of including FDI in WTO negotiations, and related  policy options for developing Asian economies.    1.1 Background In the years after the Second World War global FDI was dominated by the United States, as much of the world recovered from the destruction brought by the conflict. The US accounted for around three-quarters of new FDI (including reinvested profits) between 1945 and 1960. Since that time FDI has spread to become a truly global phenomenon. FDI has grown in importance in the global economy with FDI stocks now constituting over 20 percent of global GDP. In the US, in the late 1960s and early 1970s, foreign direct investment became increasingly politi-cized. Organized labour, convinced that foreign investment exported jobs, undertook a major cam- paign to reform the tax provisions which affected foreign direct investment. The Foreign Trade and Investment Act of 1973 (or the Burke-Hartke Bill) would have eliminated both the tax credit and tax deferral. The Nixon Administration, influential members of Congress of both parties, and well-financed lobbying organizations came to the defense of the multinational. The massive counterat-tack of the multinational corporations and their allies defeated this first major challenge to their in-terests. 1.2 Objective of the study This study is conducted with the objective to get an overall insight in the flow of FDI. The total objective is decomposed into several parts to get idea about the factors affecting the flow of FDI. The specific objectives of this study are: To give an insight into the theoretical issues relating to FDI To highlight the role of multinational corporation in FDI. To give an overview of FDI in Asian Countries. To focus on the administration of FDI. To evaluate the status of FDI to identify the prob-lem of FDI. 1.3 Methodology    Secondary data Source: Secondary data are collecting from various papers supplements like The Financial Express, The Daily Star, etc. newspapers, Internet Books are studied. Exchange of views from different people also played a significant role to do the Study. 1.4 Limitations of the study In analyzing the report presents some factors that determine the shape of the flow of FDI. But these are not surely the only factors and many important factors may be omitted from the analysis. And another thing is that the underlying factors are mostly in qualitative factors in nature and therefore cannot be measured in numerical way. The consequences are that we failed to provide absolute guideline about restructuring policy and some other decisions. The finding of the report is based on some assumed scenario and changes on those scenarios may reshape the future flow of FDI. That is the analysis is situation and time based. The biggest problem we faced in the reporting period is the  paradoxical data set. I have three sets of data in regard to the FDI, but all that provides us contradic-tory result. Board of Investment does not confirm what the bank published and vice versa. On the other hand the recording of FDI data is almost a new concept in our country. As a result I present the FDI data which I believe more accurate in best of my knowledge for the related periods.    2.1 FOREIGN DIRECT INVESTMENT IN INDIA Investment in Indian market India, among the European investors, is believed to be a good investment despite political uncer-tainty, bureaucratic hassles, shortages of power and infrastructural deficiencies. India presents a vast potential for overseas investment and is actively encouraging the entrance of foreign players into the market. No company, of any size, aspiring to be a global player can, for long ignore this country which is expected to become one of the top three emerging economies. India has in the re-cent years emerged as a favoured destination for investment in various sectors like Power genera-tion, Heavy Machinery, Infrastructure project, Telecom, Communication, Software etc. Various hurdles that existed in the economy earlier have been removed as a result of the winds of liberaliza-tion sweeping the country. India has now opened its doors to foreign investment in a major way.  Non-Resident Indians and Multinational Companies have to follow certain rules and regulations  prior to investment.


Jul 23, 2017
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