FOREIGN DIRECT INVESTMENT(FDI):
Any non-resident investment in an Indian company is direct foreign investment. Foreign direct investment is in contrast to portfolio investment, which is a passive investment in the securities of another country, such as stocks and bonds.
The Indian system of administration and governance is impregnated with flaws like shortages of power, bureaucratic hassles, political uncertainty, and infrastructural deficiencies. In spite of all these political shortcomings, India is perceived to be one of the most lucrative grounds for investing, in the eyes of the wealthy European as well as American investors. This is the true reason why the researches made into the sector establishes more and more foreign investors coming to India and investing liberally into the various sectors of the Indian economy.
Various Indian market sectors have experienced a recent progress and boom, owing to the investment made in them as well as due to the relaxation of rules and regulations that had been levied on the foreign direct investment in India, by the Indian government. The Indian law permitted only the non-resident Indians (NRIs) or persons of Indian origin (PIOs) to make foreign direct investment in India. Even these people had been levied with many restrictions. With these restrictions, a host of foreign investors and companies stormed India with their products, services and business ideas along with their money. This money in turn helped the Indian economy to grow in volume as well as statures.
Many major industrialists and business tycoons expanded their businesses to India with the boom of foreign direct investment in India. Japanese and Korean firms and businesses houses have always trusted for foreign direct investment. Many of the Indian sectors have thus benefited and in turn given lucrative returns to the investors as well. This is the reason why most of the investors keep looking towards India as a venue for investment.