A Study on Foreign Direct Investments, Role of Federal States, Incentives, and Arbitrations in India

Bhavani Marka*, Y. Prakash**
* Associate Professor, Department of Master of Business Administration, Vardhaman College of Engineering (Autonomous), Hyderabad, Telangana, India.
** Assistant Professor, Department of Master of Business Administration, Vardhaman College of Engineering (Autonomous), Hyderabad, Telangana, India.
Periodicity:June - August'2018


India marked a significant economic growth with economic liberalisation policies, utters gearing up with a growth rate of 7.1%, for fiscal 2016-17, 6.7%, for 2017-18, and estimated to 7.4%, for 2018-19 that is possible with Foreign Direct Investments (FDI) and Bilateral Investment Treaties (BIT). Department of Industrial Policies and Protection (DIPP) although autonomous governed the foreign economic policies of federal states of India under constitutionally mandatory provisions. It coordinates between the foreign investors, and the states and Centre. The Foreign Investment policies drafted to provide facilities, increments, and incentives such as low tax rates, tax holidays and tax waivers to the investors. The deviation from the articulated and accepted foreign investment policies either by the investor or by the host country raise the bivalent concerns and leads to arbitration. Undoubtedly, India's position in facing arbitrations and existing affluent arbitration policies to face international arbitrations was an ambiguous subject matter. Moreover, the transparency between the federal States and the Centre relations in harmonising the foreign investment policies was also a debatable issue. Recently Nissan sued Government of India by bringing international arbitration for remittance of INR 5000 cr. was a prima facie case for alleged violations of investment treaties with Japan bought limelight to focus on international arbitration once again. Hence, this paper evaluates the necessity to revamp foreign economic policies with lucid Centre-State relations, to overhaul the incentives or facilities offered, to have weightier arbitration policies, and to strengthen India's position on International arbitrations.


Foreign Direct Investment, FDI in India, FDI Incentives, Bilateral investment Treaties, Arbitrations in India, arbitration institutes in India

How to Cite this Article?

Marka, B., and Prakash, Y. (2018). A Study on Foreign Direct Investments, Role of Federal States, Incentives, and Arbitrations in India. i-manager’s Journal on Management, 13(1), 55-66.


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