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Foreign investment can be defined as the acquisition of assets by governments, institutions, or individuals in one country of assets in another. Foreign investment covers both direct investment as well as portfolio investment and includes public authorities, private firms, and individuals. Direct investment is often referred to as Foreign Direct Investment (FDI). FDI inflows have increased in importance since the 1990s, becoming the single most significant component of total capital flows to developing countries. At a time when the world economy is facing the worst credit freeze in several decades, India Inc. continues to be a favorite FDI destination. The FDI figures for January, 2009 bring a renewed hope that India is back on the radar of global investors once again.
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Author(s): Yuvaraj Govindraj and Rajesh K Nema