India and China have common giant markets, long histories, huge populations and growth rates. Both the countries have ancient and prestigious cultural heritage. Both the countries have embraced economic reforms and liberalization- China in 1970s and India in 1990s. Both are in a process of liberalizing their economy and they are open for FDI. FDI is considered as the catalyst to the market growth for the developing countries like India and China. Besides supplementing capital in the economy, FDI is a principal conduit of technology upgrade, transfer and managing skill exchange. As far as developing countries are considered, global competition for FDI is increasing. India and China, both are aiming for high share of the FDI. They are integrated with the global economy and they have open up their markets for international trade and investment flows.
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