Advantages and Disadvantages of FDI in China and India

Abstract

This study was directed towards detecting the positive and negative sides for the foreign investors while they go for direct investment in India and China. A descriptive and explorative research study has been carried out for investigating the current proposition of the concemed case of FDI in those two countries. Advantages of investing in India includes-Huge market size and a fast developing economy, availabilify of diversified resotirces and cheap labour force, increasing improvement of infrastructure, public private partnerships, IT revolution and Enghsh literacy, openness towards FDI, regulatory framework, and investment protection, where as few drawbacks likes huge section of poor and middle class, bureaucracy, power shortage and ethnic diversified are also available in the country. As far as the case of China is concem positives areas are the immense size and growth of the Chinese economy and very bright prospects, resource availability and low cost of labour force, immense development in relevant infrastructure, openness to intemational trade and easy access to intemational markets, development and alteration of the regulatory framework, investment protection and promotion. There are also few drawbacks as well like the regulator burden, hindrances in free fiow of information, lack of English hteracy and so on.