Governments try to attract foreign investment because it helps to create more job opportunities in a country, directly as well as indirectly in service sector. We can gain additional taxes by taxing the profits made by foreign investments.
Why does government attract foreign investment?
Governments try to attract more foreign investment for the following reasons (a) It helps in improving the financial condition of the people by accelerating growth of the economy. (b) Foreign investments create new job opportunities in the country, directly as well as indirectly in support services like transportation.
How is the government of India trying to attract more foreign investments?
Govt of India attracts foreign investment by: … The government has set up Special Economic Zones with best facilities of electricity, water etc. 2. Companies who set up their units in SEZs don’t need to pay taxes for the first five years.
How can we attract foreign investment in our country?
Contribute to the set-up of Investment Promotion Agencies (IPA). A successful IPA could target suitable foreign investors and could then become the link between them and the domestic economy. On the one side, it should act as a one-stop shop for the requirements such investors demand from the host country.
What attracts the foreign investment class 10?
Number of steps have been taken by the government to attract foreign investments in India. These are: # Industrial zones, called the Special Industrial Zones (SEZs) have been set up. These have world class facilities: electricity, water, roads, transport, storage, recreational and educational facilities.
How does government attract foreign investment Explain with examples?
(i) The government has set up industrial zones called special Economic Zones (SEZs). SEZs provide world class facilities – electricity, water, roads, transport,storage recreational and educational facilities. … (iii) The government has also allowed flexibility in the labour laws to attract foreign investment.
What are the incentives extended by Govt of India for attracting foreign capital?
The Indian government has provided many incentives for attracting FDI, such as establishing Special Economic Zones (SEZs) where companies are entitled to certain benefits, exemption from duty on import, income tax exemptions, value added tax (VAT) rebate on export, opening up of many sectors for FDI, etc2.
What are arrangements made by government in India to attract MNCs?
Answer: SEZs are made by the govt. to attract MNCs as it does not levy taxes for first five years and provide them full security.. flexible labour laws are provided .
Why India is an attractive destination for foreign direct investment?
Following this, factors such as relatively lower wages, special investment privileges such as tax exemptions, a conducive business environment and a fast-growing consumer base also attract foreign companies to invest in India.
How the central and state government in India are taking special steps to attract foreign companies to invest in India?
The Indian Government attracted foreign companies in the following ways: Special Economic Zones (SEZs) are being set up to have world class facilities such as educational, electricity, water, transport, storage recreational etc. Production units in SEZs are initially exempted from taxes for a period of five years.