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5 Advantages of Foreign Direct Investment in India

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Title: 5 Advantages of Foreign Direct Investment in India


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5 Advantages of Foreign Direct Investment in India
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1. EMPLOYMENT
  • The disguised unemployment in the secondary
    sector is the major crisis Indian skilled or
    unskilled labour is facing, foreign investments
    prove themselves.
  • FDI has boosted job- creation and increased job
    options leads to increased income which
    ultimately leads to an increase in the expansion
    of the Indian Economy.

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2. HUMAN CAPITAL
  • Human Capital refers to the talents and
    brainpower in the form of the human resource of a
    country.
  • India is fortunate enough to have a great human
    resource in the way of its youth. Lack of
    education, skill development and job
    opportunities mar such resources.
  • FDI in India bridges the gap between social
    capital and better job options.

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3. STABLE EXCHANGE RATE
  • The foreign exchange in India has improved
    drastically with the inflow of Foreign
    Investments. Hence, the central bank of India
    maintains a stock of several international
    exchanges in bulk.
  • This stabilises the exchange rate thereby
    building a stable foreign monetary policy.

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4. ADVANCEMENT OF BUSINESS AND TECHNOLOGY
  • The state, businesses or firms receiving FDI in
    India are given access to a vast horizon of open
    markets and trade in any part of the world.
  • These foreign companies provide all the
    modernised tools and technologies along with
    modern financial techniques for the all-round
    profit of the business.

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5. ECONOMIC GROWTH
  • Apart from generating jobs and better financial
    conditions, foreign investment is also a
    significant source of revenue collection in
    India.
  • Whenever a company launches a new tie-up or opens
    a new hub in the Indian Market, a large portion
    of its profit is deducted as a revenue. Hence,
    the external capital inflow is increased, and the
    Indian Economy grows.

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