Fredrik Sjöholm started the discussion by noting that descriptions of foreign direct investment (FDI) are often centered on the theoretical OLI framework, which describes the incentives for FDI as stemming from ownership advantages (O), location advantages (L), or internalization advantages (I). In this setting, he asked whether the OLI factors could be combined to develop aggregate FDI predictions at the country level. Next, he noted that the competence of India's skilled labor pool supports India's outward FDI at the same time that this competence acts as a draw for inward FDI activities as well. Since the simultaneity of these outward and inward activities is unusual in the global context, Sjöholm asked how policymakers and researchers should think about this phenomenon.
Because the presentation highlighted the weak performance of India's manufacturing sector, Dick Durevall asked whether the foreign acquisition of knowledge assets by India's firms might have a longer-term effect on India's productive capabilities. Just as the purchase of Volvo by Chinese firms may help Chinese firms with their longer-term production in China, Durevall suggested that India's foreign acquisitions could help India with production in the future. Durevall also cautioned that the authors should be careful in distinguishing between and discussing competitive and comparative advantage.
Although the composition of India's outward FDI may initially appear puzzling, John Knight observed that India is known for its high-quality service sector, which may be responsible for India's comparative advantage and FDI activities.
In response to the group discussion, Prema-chandra Athukorala noted that researchers on India often characterize India's FDI activity as a reflection of a shining India. In contrast, his work on this project suggests that fundamental problems in India are responsible for the large outward FDI flows. For example, in the policy dimension, reforms have been half-hearted with the exception of software industry reforms in the 1980’s, which received broad support and resulted in liberalization of the industry. Athukorala argued that the striking aspect of India's FDI is its concentration in capital-intense sectors, which departs dramatically from the FDI development paths of countries like Japan, Taiwan, and Korea, all of whom initiated their FDI efforts in labor-intense industries first. Although this path might appear to be the one India should have taken as well, Athukorala argued that the restrictiveness of regulations in India explains the absence of growth in Indian manufacturing and the absence of economically meaningful Indian participation in dynamic global production chains. Finally, in support of Athukorala's arguments about the difficulties of working in India, Remco Oostendorp offered Samsung's contrasting FDI activities in India and Vietnam as evidence of India's internal problems. Though Samsung has entered into India through FDI, its production in India is purely devoted to serving the Indian market. In contrast, Samsung's FDI entry in Vietnam has led to the employment of 10,000 workers, and has developed facilities that have spurred Vietnamese export.