Explain any three disadvantages of FDI.

1.	Explain any three disadvantages of FDI.
Answer» 1. Exploiting Natural Resources : The FDI Companies deplete natural resources like water, forest, mines etc. As a result such resources are not available for the usage of common man in the host country. 2. Heavy Outflow of capital : Foreign companies are said to take away huge tunes in the form of dividend, royalty fees etc. This causes a huge outflow of capital from the host country. 3. Not Transferring Technology : Some foreign enterprises do not transfer the technology to developing countries. They mostly transfer second hand technology to the host country.

Answer»

1. Exploiting Natural Resources : The FDI Companies deplete natural resources like water, forest, mines etc. As a result such resources are not available for the usage of common man in the host country.

2. Heavy Outflow of capital : Foreign companies are said to take away huge tunes in the form of dividend, royalty fees etc. This causes a huge outflow of capital from the host country.

3. Not Transferring Technology : Some foreign enterprises do not transfer the technology to developing countries. They mostly transfer second hand technology to the host country.

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