What is the impact of foreign investment on Indian Economy
The allegation against India being a bully in water sharing with Bangladesh has certain realties in it but such matters have a history of complexities behind them. The fact that India has occupied an upstream position on shared rivers gives it a strong bargaining power. Bangladesh, on the other handRead more
The allegation against India being a bully in water sharing with Bangladesh has certain realties in it but such matters have a history of complexities behind them. The fact that India has occupied an upstream position on shared rivers gives it a strong bargaining power. Bangladesh, on the other hand, happens to lie downstream and thus, usually comes at the mercy of that power play. That often leads to conflict during times such as drought or flooding, where such water management decisions in India would affect serious consequences on Bangladesh.
But even so, India and Bangladesh have signed a number of bilateral memorandums for cooperation regarding water resources. They haven’t quite resolved matters; rather, India generally cites its own domestic needs, in some of these regions, connected to these rivers-for instance, West Bengal-from having its water management decisions justified.
So, even though Bangladesh’s concerns are pretty valid, the entire picture is not one-sided. The two countries must sit together and evolve means, which would result in sustainable solutions to meet the needs of both populations.
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Foreign investment is one of the vital factors in the Indian economy and seems to be an input to develop and grow the economy in general. It is quite much required for bringing in the cash flow to the sectors of manufacturing, technology, and infrastructure. FDI is considered the gateway for transfeRead more
Foreign investment is one of the vital factors in the Indian economy and seems to be an input to develop and grow the economy in general. It is quite much required for bringing in the cash flow to the sectors of manufacturing, technology, and infrastructure. FDI is considered the gateway for transferring the technologies, skills, and management systems directly or indirectly leading to productivity improvement and efficiency improvement. There is employment generation followed by skill development in such cases.
Foreign investment increases the foreign exchange reserves in India and later manages stability in the currency with less dependency on external borrowing. Competition leads to better quality products and services for consumers. It also brings into the fold of global supply chains and creates opportunities for export.
Thus, problems arise. One is that too much foreign capital dependency makes the economy susceptible to external shocks. The other is that, in certain sectors showing obvious foreign dominance, questions about national interest and national security may raise their heads. In addition, foreign enterprises’ profit repatriation limits the reinvestment of domestically earned income.
Foreign investment is playing a very important role in keeping the economy of India going, but these investments have to be balanced with perfectly intelligent policies to derive maximum benefits while decreasing any risks involved.
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