What are the problems related to FDI in India?
Ans. The problems related to FDI in India are as follows: (1) FDI tends to flow to the high profit area rather than to the priority sector. (2) The technologies brought in by the foreign investor may not be adapted to the consumption needs, size of the domestic market, resource availabilities, stage of the development of the economy, etc. (3) Through their power and flexibility, MNCS can evade or undermine economic autonomy and control, and their activities may counter the national interest of particular countries. (4) Foreign investments sometimes have unfavourable effect on balance of payment of a country because of the drain of foreign exchange in the form of royalty, dividend, etc. is more than the investment made by the foreign concern.
(5) Foreign capital sometimes interferes in the national policies. (6) Foreign investors sometimes engage in unfair and unethical trade practices.
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