Full Form of FDI
FDI stands for Foreign Direct Investment.
Key Aspects of FDI:
Definition: FDI refers to the investment made by a company or individual in one country in business interests in another country. This typically involves acquiring a lasting interest in a foreign enterprise.
Purpose:
- To establish a business presence in a foreign country.
To gain access to new markets, resources, and technologies.
Types of FDI:
- Greenfield Investment: Establishing a new business from the ground up.
Mergers and Acquisitions: Purchasing or merging with an existing foreign company.
Benefits of FDI:
- Economic Growth: Stimulates economic development in the host country.
- Job Creation: Leads to the creation of new jobs.
Technology Transfer: Facilitates the transfer of skills and technology.
Challenges:
- Regulatory Barriers: Different countries have varying regulations that can affect FDI.
- Political Risks: Political instability can impact investment decisions.
Understanding FDI is crucial for businesses looking to expand internationally and for governments aiming to attract foreign investments.