The aim of this study is to determine the impact of Foreign Direct Investment (FDI) inflows on environmental pollution in India for the time period 2002-2017. To this effect, ‘environmental pollution’ has been split into two types; water and air pollution. A previous article of this study established that FDI inflows have a significant positive impact on air pollution in the form of greenhouse gas emissions. This article establishes the methodology adopted for empirically testing the impact of FDI inflows on water pollution of India.Read more »
India highly depends on foreign investments in the form of foreign direct investments (FDI) to fund its economic growth (Demirhan & Masca, 2008). Amongst all the sectors, the manufacturing sector and service sector has undergone a transformation and experienced high growth rates in the past few years. However, from the data on FDI, it can be observed that few key industries belonging to these two sectors have boosted at a faster rate than the others and attracted more FDI than the others.
The Indian economy witnessed a high FDI inflow after the reform of economic liberalization. The increasing trend continued in the last financial year 2017-18. This increase can be attributed to factors such as the high rate of GDP growth, low inflation rate, exchange rate, trade openness and economic and political stability. Since 2000, the service sector and selected industries in the manufacturing sector showed significant growth and were able to attract a large fraction of the total FDI. One of the reasons due to which these industries performed well is the union budget of 1999-2000 which supported greater inflow of FDI through the automatic route (Singh, 2005). Increased FDI in these industries has opened up new doors for better technology, management and marketing networks. Furthermore, it has generated more employment opportunities and offered a high level of competition in domestic industries (Shapiro & Mathur, 2014). Read more »
The Indian pharmaceutical industry has emerged as the third largest country in the world in terms of volume with a turnover amounting to US $ 21.04 billion in 2009. In addition to this, the industry includes more than 20,000 licensed companies that employs 500,000 people (Industry, 2011). Furthermore, Indian pharmaceutical industry secured the top position among the science based industries through a range of capabilities in production and technology. In terms of market segmentation, leading 250 pharmaceutical companies have controlled 70 % of the market (PwC, 2012). Read more »
The metallurgical industry has played a significant role in India’s economic growth. India produces 95 minerals, 4 fuel related minerals, 10 metallic minerals, 23 nonmetallic minerals, 3 atomic minerals and 55 minor minerals including building and another type of minerals (FICCI, 2018). The mineral production in India has shown significant growth at CAGR of 5.72% between 2013-14 and 2017-18 to reach an estimated amount of US $ 17.62 billion in 2017 -18 (Indian Brand Equity Foundation, 2018). Read more »
The Indian textile industry has occupied a prominent place in the economic development of the country since independence. The industry has expanded at a very fast rate to become the second largest producer of textile and garments. The Indian textile industry accounts for 24% of the world’s spindle capacity. In terms of the growth of the industry, the market size of the industry has grown from $ 70 billion to $ 90 billion in 2012 (India Brand Equity Foundation, 2012). The industry has also emerged as the second largest employer after agriculture and is expected to grow five-fold in the next ten years to cross the market of $ 500 billion. Further, the industry contributed 5 % to the GDP and 27 % to the country’s foreign exchange inflows in 2012 (Paper, 2015). Read more »
The Indian chemical industry has gained a major share in Asia’s growing contribution to the global chemical industry. It has also emerged as one of the preferred destinations for investment in the chemical industry worldwide (Chambers, Road, & Nadu, 2012). With the global share of 3 %, the Indian chemical industry covered a size of about $ 108 billion in 2012 and $ 290 billion in 2017 (Industry, Update, & Kapoor, 2018). Read more »
The previous articles analysed the impact of foreign direct investment (FDI) on the economy of India in the post-reform period. However, one cannot make a systemic assessment of the foreign investment without looking at the cost. The reason is simple. Rapid industrialisation has cost India its environmental health. Economic and environmental performances are complimentary for development because the environment provides all the natural resources necessary for the production of goods and services. Production leads to growth but the by-products and wastes create pressure on the environment, resulting in pollution. Read more »