Impact of IFRS convergence in India on foreign direct investment

In the present era of globalisation and liberalisation, the world has become an economic village. A number multinational companies are establishing their businesses in various countries and to fulfil their capital needs, they are getting their securities listed on the stock exchange outside the country. As capital markets are becoming global, there is a need of common set of accounting standards so that financial statements can provide more reliability, uniformity and comparability. For this purpose, all the economies are moving towards adoption or convergence to IFRS (International Financial Reporting Standards) and India is not behind. The MCA (Ministry of Corporate Affairs) had issued a roadmap to the IFRS Convergence in India. Out of the several benefits of IFRS Convergence, it is advocated that inflow of FDI in the economy is one the greatest for the economy adopting or converging to IFRS. IFRS will enable the Indian business entities to have access to international markets and as a result will attract FDI into India. This paper is an attempt to highlight the impact of IFRS Convergence on FDI as an emerging opportunity for Indian economy.