Bank Exams Exam  >  Bank Exams Notes  >  RBI Grade B Phase 1 Preparation  >  The advantages and disadvantages of FDI

The advantages and disadvantages of FDI | RBI Grade B Phase 1 Preparation - Bank Exams PDF Download

Stating the advantages and disadvantages of FDI

FDI is investment by an individual or a company from another country. A foreign direct investor can invest in a company by means of merger or acquisition, or by setting up a new venture. Economic liberalization in 1991 opened the Indian economy to foreign investments. Advantages of Foreign Direct Investment (FDI)  Capital inflows can create higher output and jobs.  Recipient countries will benefit from improved knowledge and expertise of foreign companies. 

Investment from abroad could lead to increase in salaries and better working conditions  

  • Economic Development Stimulation.  
  • Can create a Resource Transfer.  
  • Can lead to Increased Productivity.  
  • Will result in Increase in government revenue.  
  • Quality of products and flow of technology. 
  • Improvement of agricultural sector. 

Disadvantages of FDI  

  • It can hinder the Domestic Investment.  
  • Negative Influence on Exchange Rates.  
  • Destruction of small entrepreneurs.  
  • Shrinking of jobs in some sector.
  • No real benefit to farmers.  
  • It can increase the Trade Deficit.  
  • Can lead to inflation. 

Conclusion: The government should move in that route if it wants to turn the Indian economy into a developed economy since FDI is the future of India.

The document The advantages and disadvantages of FDI | RBI Grade B Phase 1 Preparation - Bank Exams is a part of the Bank Exams Course RBI Grade B Phase 1 Preparation.
All you need of Bank Exams at this link: Bank Exams
373 videos|670 docs|196 tests

Top Courses for Bank Exams

373 videos|670 docs|196 tests
Download as PDF
Explore Courses for Bank Exams exam

Top Courses for Bank Exams

Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev
Related Searches

Previous Year Questions with Solutions

,

Objective type Questions

,

Free

,

The advantages and disadvantages of FDI | RBI Grade B Phase 1 Preparation - Bank Exams

,

Summary

,

Sample Paper

,

Important questions

,

Extra Questions

,

study material

,

past year papers

,

practice quizzes

,

Semester Notes

,

MCQs

,

Viva Questions

,

video lectures

,

Exam

,

mock tests for examination

,

The advantages and disadvantages of FDI | RBI Grade B Phase 1 Preparation - Bank Exams

,

pdf

,

The advantages and disadvantages of FDI | RBI Grade B Phase 1 Preparation - Bank Exams

,

shortcuts and tricks

,

ppt

;