Impact of trade related investment measures on foreign direct investment in india

Abstract

Background: World Trade Organization has given Trade Related Investment Measures (TRIMS) to harmonize flow of Foreign Direct Investment (FDI) among the member countries. India became member of the WTO in 1995 so TRIMs agreements have considered as an important part of broader national policy rule, it designed to achieve some important goals of nation s industrialization through export expansion, skill acquisition and entrepreneurship, import substitution, local employment, balance of payment improvement and promote transfer of technology. newline newlineAim: The researcher sought to demonstrate that FDI under the TRIMs have promotional and developmental role to encourage new investment in needy areas. Moreover, she has examined TRIMs agreement, and the empirical effects of some of these TRIMs in India. To examine empirically the impact of TRIMs on inward FDI in India this study has focused on the impact of some important determinantes. It includes performance requirement: 1. Export performance requirement, 2. Transfer of technology requirement, 3. Foreign exchange restrictions, 4.Trade balancing requirement, and 5. Local content requirement. newline newlineMaterials and Method: Researcher has used secondary data in this empirical research. Data are originally collected from published sources, which are compiled from RBI Statistical year book from 1991 to 2010(Time series data), various SIA/FIPB newsletters which are published by DIPP. Researcher has referred UNCTAD World Investment Report 2013 to refer global performance of FDI of India towards other countries. Moreover, she has used statistical tools like Ordinary Least Square (OLS) method of estimation: correlation and Multiple Regression Analysis. The exploratory variables describe in the econometric model for FDI activities in India. The statistical analysis has been analyses with the help of SPSS software version12 newline