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Answer: Foreign direct investment is a type of investment in which one country allows the other countries to invest in their country and expand their workings. Foreign Direct Investment not only allows the country to flow the money and its related assets but also the knowledge, skills and the new and advanced equipment’s and software’s which the developed countries use in their workings on daily basis. Foreign direct investment helps a country to grow more and more like the foreign companies who set up their business here in our country provides employment opportunities in our country and promotes trade-related activities to the different traders and provide the consumers with the new and better quality of products and services. The higher degree of foreign direct investment also helps the country to make a positive balance of trade in the country as the foreign direct investment helps to reduce the import and its related activities, as it itself brings the new technological equipment’s and new machineries which are imported by the manufacturers and helps the employees to get familiar with them and provides necessary skills and knowledge to use them for producing mass quantity of goods and products and helps in expansion of the company and trade of the country.
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