An Analytical Study On Foreign Direct Investment In Indian Information Technology Industry

Abstract

India has made tremendous progress in building a policy environment to encourage newlineinvestment. As a result, the country s economy is growing more rapidly and FDI inflows in newlineIndian Information Technology industry have accelerated impressively. However, investment newlineremains insufficient to meet India s needs, particularly in infrastructure. Current efforts to newlinestrengthen and liberalize the regulatory framework for investment in IT sector need to be newlineintensified and India s well-developed economic legislation implemented at an accelerated newlinepace both at national level and right across India s states and union territories. newlineIndia has made impressive strides in building a policy environment to encourage both newlinedomestic and foreign investment, in particular to attract foreign direct investment (FDI) and newlinefacilitate outward investment, as evidenced in this study. This progress is an integral part of newlinethe market-oriented reforms which have since 1991 set the scene for a shift to a consistently newlinehigher rate of real annual GDP growth than the country has experienced in its recent history. newlineThe license raj has been largely dismantled. Restrictions on large-scale investment have newlinebeen greatly relaxed. Many sectors formerly reserved to the public sector have been opened newlineup to private enterprise. Import substitution and protectionism have been replaced by an open newlinetrade regime. Sectoral restrictions on FDI have been progressively removed and foreign newlineownership ceilings steadily raised. FDI approval procedures have been greatly liberalized. newlineForeign exchange restrictions related to investment have been relaxed. Experimental newlineeconomic zones such as the Special Economic Zones have been established to test investment newlineliberalization measures. At the same time, other elements of the business environment that newlinehave an impact on investment have improved. The legal framework for intellectual property newlinerights (IPR) protection has been greatly developed in the past two decades and enforcement newlinehas been strengthened. A non-discriminatory Competition Act is be