The full form of FDI is Foreign Direct Investment. It is the investment made in a company with a national base into an organisation with a national base. It differs from how a multinational investor invests in the stocks listed on a country’s stock exchange in terms of portfolio movement. Simply put, direct investment is when an investor tries to influence or control a corporation in a certain country. In countries with open economies, strong potential for growth, and skilled labour, foreign direct investment is frequently made at relatively low costs.
Advantages of FDI
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There are several advantages to FDI; a few of the main benefits are listed below:
- It produces jobs for the nation.
- It brings new capital into the country.
- expands the nation’s forex role
- It brings new technologies and expertise to a country.
- It boosted prosperity and raised tax receipts.
- It gives the investing company access to a country’s foreign market. If the international target market has lower salaries, the investing company may be able to cut production costs.
- The investor corporation can utilise a nation’s natural resources, including metals, fossil fuels, and other things.