Why Oppose If Fdi Can Make Indians Wealthy

There is no nation which can claim to have become rich by itself. All such nations have heavily got wealth of some other nation transfered to itself by legitimate or other means. This has given a boost to its liquid wealth which its citizens have then converted into productive assets. 

When a nation carries out trade only within its geographic borders then its generated income is getting distributed and redistributed amongst its citizens. The nation's total wealth remains static. However when it does trade with another nation then it gets additional income and in the process the country's wealth now starts

going up. More the international trade more wealthy the nation and its citizens become.

History is witness to this phenomenon. This is the reason why India was a rich country till the end of Mughal rule. India was active in international trade and its share was a whooping 25 % of the global trade. Even today China's share is around 11% of the world exports.

However, when the East India Company and then the British rule came, they converted India into a net buyer from a net supplier. This resulted in our trade balance turning into negative and  till today our imports are much higher than our exports every year. This has made us into overall a poor country. But in the bargain Britain managed to earn huge amount of wealth from our country and is today also a rich nation. Same is the story of other nations like France,Spain, Portugal, Netherland etc which through trade and otherwise earned huge wealth from other nations and themselves became rich and their citizens enjoy a high standard of living.


modern times USA, China, Germany, Japan, France etc have earned tremendous wealth from trading with other nations. But what about India?

India is a highly populated country whose per capita income is low by international standards. Vast bulk of its people are poor. Its share of international export trade is nearly 2%. It has a moderate foreign exchange reserve of app. $300 billion compared to its population of more than 1.25 billion, giving a per capita reserve of $240 or Rs 13,000 app. compared to China's Rs 1,32,000 per capita figure.

It is therefore necessary that external flow of funds into India should be increased other than through trade only. One such way is through the FDI route in various sectors of the economy. In this manner external funds will get invested in India into productive assets. The creation of such assets will pump in money into all sections of the society and overall wealth of the nation will go up.

Every time the government announces steps to attract FDI the fringe political parties start opposing and together they gang up to scuttle the proposals. India today is far more stronger than what its politicians would have us believe and can regulate the flow of foreign funds in such way as to not harm any section of the society.

FDI should be encouraged and welcomed in as many sectors  as possible in order to make the country and its citizens richer than what they are today.


Article Written By vks1000

Am a retired professional who is now into education of International Business and management topics. I enjoy writing and like reading on politics,economics,management and films. I take life as it comes and try to keep myself busy with a variety of activities.

Posted on 19-09-2012 105 0

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