| Summary: | The economic liberalization and deregulation of the Indian economy through a series of bold
economic reforms in 1991 has brought about a significant transformation in the economic
and industrial landscape. Since these reforms which include liberalization of the Foreign
Direct Investment (FDI) regime and integration of the country's economy with the global
economy, there has been a surge in the outflow of investments and more specifically
Outward Foreign Direct Investment from India. This was initially through Greenfield
investments with the latest trend being investments through Mergers and Acquisitions.
Predominantly, the manufacturing sector has capitalized on these investments followed by
services. Although OFDI from India began in the early part of the century, it was a trickle and
is now in a Take Off Phase and hence, it is essential to understand the reasons and
motivations of Indian companies to engage in Outward Foreign Direct Investment.
This study aims at understanding these reasons and motivations through a survey of Indian
Multinationals. This study also aims at analyzing the benefits of Outward Foreign Direct
Investment to the Indian multinational companies, outlining the measures to be taken to
improve the laws prevalent in India to facilitate such investments and thereby contributing to
the academic field and theories of Foreign Direct Investment.
During the course of my research, I realized that this topic has not been delved into by many
authors. Since research on this topic was few, my research also aims at providing a
comprehensive and detailed understanding of the topic.
Detailed analysis conducted on the topic shows that there are various firm-specific
objectives driving Indian companies to invest abroad, some of them being, financial benefits,
scale economies, access to markets, technology, global supply chains etc. It was also
realized that the nature of these investments being long-term, firms take a few years before
actually realizing full benefits from the investments.
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