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Is FDI included in GDP of the country in which it has been invested?

Is FDI included in GDP of the country in which it has been invested?

Comments

  • Yes ... it is included . For the simple reason that , GDP is the sum total of all the monetary value of goods and services produces within the territory of the nation irrespective of its nationality .This is precisely what distinguish it from the GNP. In GNP, the production of goods and services by the citizen of the nation is taken into account irrespective of the nation in which the person is working.
    So GDP , in this way , tantamount to flawed depictions of the current situation of the nation . In developing nations, the GDP is more than the GNP (which is not economically good condition ) whereas the converse is true for the developed nations .
  • Yes. Read chapter on GDP ramesh bhai, and if it seems too complex refer to GDP calculation and NI and GNP calculation in NCERT, and if not possible to for mrunal bhai.

    Fdi isn't FPI (although difference reducing with time) in which case it may include hot money or hawala money.
  • Just coming of FDI doesn't add to GDP; it has to be used to "create" (i.e. goods or services) something in the relevant territory. That's the reason the increased FDI in India, nowadays, is being questioned for it's utility in creating assets because much of it is capital "replacing" rather than capital "creating." For instance when BP buys RIL's stake (and I am NOT talking about FPI, which is done on bourses), and the money brought is not used for any expansion but results only in change in ownership pattern, then even though it's FDI but won't contribute to GDP.
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