FDI Issues: A Comparitive Analysis of India and China

Still it is questionable, whether FDI is boom or bane for host countries economic growth and development? Opinions are still divided. FDI has its own advantages and disadvantages. But many are of the opinion that basic objective of foreign investments is to earn profits by ignoring the overall social and economic development of host nation. And also opine that India is dedicated to the principle of “National interest” but the country allows foreign firms to gain quick returns on their investment regardless of economic externalities. It is fact that India's FDI is far below that of China. Hence it appears India can learn a lot from the FDI policy and experience of China is not only attracting FDI but also utilizing it successfully for its development. In this background an attempt has been made to identify the issues associated with India's unattractiveness as an investment location.