A Study Of Outward FDI By Indian Firms

Sooner after political independence, Indian firms started to invest outward by setting up joint ventures or wholly owned subsidiaries. In early 1960's, a number of Indian firms went overseas establishing subsidiaries or joint ventures with local firms. And during the following two or three decades, Indian firms had been investing outwards continuously. Since economic liberalization commencing in early 1990's, Indian firms have been raising their outward FDI flows. By 2003, India had become the 14^th largest investor in terms of outward FDI stock among developing economies. And up to now, India is becoming an important global investor. Combining with theory of FDI of transnational corporations, this paper systematically discusses the multi-aspects of India's outward FDI.This paper discusses the general conditions, characteristics, reasons and government policies of outward FDI from Indian firms pre and after economic reform starting in early 1990's. And it also gives the outlook of India's outward FDI as well as the enlightenment for China's overseas FDI.Before economic reform, the development of outward FDI from Indian firms was rather slow in accordance with fairly slow domestic economic growth. During that period of time the amount of outward investment was tiny, and most activities concentrated on manufacture and gathered in third world countries through joint ventures. But since economic reform India's outward FDI has been developing...