Overseas Direct Investment
So many people and companies are now looking to expand abroad. Many tend to do this, and many have already done so. An Indian party intending to invest outside India can make the investment following the rules issued by the Reserve Bank of India. Under the Overseas Direct Investment or ODI rules, investment in a Joint Venture (JV) or Wholly Owned Subsidiary (WOS) outside India can be made either through the automatic route or through approval. Few important definitions to understand:
Joint Venture – An investment in a foreign entity is made jointly by one or more persons or one or more entities or any combination of persons and entities where at least one of the investors is a resident of India. Wholly Owned Subsidiary (WOS) When the investment of a single entity or individual is a foreign entity, it is called a wholly owned foreign subsidiary (WOS).
Overseas Direct Investment (ODI) Benefits:
Indian companies can gain better access to technological knowledge.
- Global expansion of business.
- Broad market access.
- Global customer base.
Since the globalization of business is a two-way process, the integration of the Indian economy with the rest of the world with all its attendant benefits is achieved through foreign investment.