With reference to Foreign Direct Investment in India which one of the following is considered its ma...........

Economic and Social Issues Budgeting and Fiscal policy

With reference to Foreign Direct Investment in India, which one of the following is considered its maior characteristic ?

It is the investment through capitol instruments essentially in a listed company.

It is largely non-debt creating capital flow.

It is the investment which involves debt-servicing.

It is the investment made by foreign institutional investors in the Government securities.

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Explanation:

Foreign direct investment (FDI) takes place when investor establishes foreign business operation or acquires foreign business aseets, including establishing ownership or controlling interest in a foreign company. Thus, Foreign direct investment (FDI), being a non debt capital flow, is a leading source of external finance. Hence option 2nd is correct.