Impact of FDI on Competitiveness in India

Though, it is often believed that those economies which are strongly competitive are able to attract more FDI, but still the relationship between FDI inflows and its impact on competitiveness is an issue of enquiry. Foreign direct investment involves long term relationship reflecting a lasting interest and control of a resident entity in one economy in an enterprise resident in an economy other than that of the foreign direct investor. (World Investment Report, United Nations, 2002). On the other hand, competitiveness is a diverse concept as different economic agencies define competitiveness in different ways. The fundamental principle, which allows the distinction between notions of competitiveness of nations and competitiveness of enterprises, focuses on where the creation of economic value takes place. The economic value is only created within the context of an enterprise, whereas, a nation's environment hinders or supports this process through its policies. The present book is an attempt to provide an insight into impact of FDI on macroeconomic variables having a bearing on competitiveness in the context of Indian economy along with, in the context of Indian firms. Defining competitiveness differently in the context of economy and firms may help us in providing a more comprehensive assessment of impact of foreign direct investment on competitiveness of India.