Which of the following would include Foreign Direct Investment in India? 1. Subsidiaries of companies in India 2. Majority of foreign equity holding in Indian companies 3. Companies exclusively financed by foreign companies 4. Portfolio investment Select the correct answer using the codes given below:

QUESTION

Easy

Economy

Prelims 2012

Which of the following would include Foreign Direct Investment in India?

Subsidiaries of companies in India
Majority of foreign equity holding in Indian companies
Companies exclusively financed by foreign companies
Portfolio investment

Select the correct answer using the codes given below:

Select an option to attempt

Explanation

Foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.

Foreign direct investments can be made in a variety of ways, including the opening of a subsidiary or associate company in a foreign country, acquiring a controlling interest in an existing foreign company, or by means of a merger or joint venture with a foreign company.

Foreign direct investments are distinguished from portfolio investments in which an investor merely purchases equities of foreign-based companies.

Therefore, the correct answer includes the first three options but not the fourth.

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