Of course, FDI is going to be a game changer in the economic development of the union territory as the investment will boost local economic potential and will have a greater impact on the lives of the local population.

Even as foreign direct investment (FDI) is not a new phenomenon in the country, in a geography like Jammu & Kashmir this kind of investment might leave general masses clueless for lacking its understanding in the context of the local economic landscape. So, let’s understand what foreign direct investment (FDI) is all about.

In simpler terms, FDI is a route for foreign companies to run their business operations in another country. The foreign companies bring money, knowledge, skills and technology with them. All these things sum up to bring vibrancy in the local economy and throw open job opportunities to the local youth.

To be precise, an investment for setting up foreign business operations or acquiring foreign business assets, including establishing ownership or controlling interest in a foreign company, is foreign direct investment.

Remarkably, foreign direct investment (FDI) in the retail sector has always remained in the limelight. Even as there were some controversies attached to it in the beginning, it proved a boon for the retail segment in the country after the government of India allowed FDI in the retail sector in 2006.

Currently, the retail sector of India is considered to be one of the most important emerging sectors, and therefore, the FDI in the retail sector plays a very crucial role in the economic growth and development of the country.

Pertinently, globalisation has already made economic boundaries irrelevant and FDI has emerged as a key route to reap its benefits.

Through this mode, businesses across various boundaries get easy access to new markets and marketing channels, cheaper production facilities, access to new technology, products, skills and of course financing.

The place where a foreign business house directly makes investment, can lead to a source of new technologies, capital, products, management skills etc.

Ultimately all this will translate into strong impetus to economic development of that place where foreign direct investment is pumped.

However, you cannot expect the originating country from which the investment flows, not getting benefited. Ultimately, everybody invests to earn profits.

How can FDI change fortunes? I think China is the best success story. The country permitted FDI in retail in 1992. It has since attracted huge investments in the sector without affecting either small retailers or the domestic retail chains.

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