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Indian Economy - Understanding the basics of Indian economic system

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Regarding the Foreign Investment in India, consider the following statements

Foreign Portfolio Investments (FPIs) involve investing in the long term.
Foreign Direct Investments (FDIs) involve investing in financial assets in short to medium-term.
Government’s prior approval is mandatory for FDIs from countries sharing land border with India.

How many of the following statements is/are correct?

Only One

Only Two

All Three

None

Explanation:

Only statement 3rd is correct.

Foreign investment encompasses two widely chosen investment avenues, namely Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI).
Foreign Direct Investment (FDI) entails direct investment, offering control and a long-term outlook.
Foreign Portfolio Investments (FPI) involves investing in financial assets without control, typically being short to medium-term.
Government’s prior approval is mandatory for FDIs from countries sharing land border with India (China, Bangladesh,Pakistan,Bhutan,Nepal, Myanmar and Afghanistan).

Hence option 1st is correct.

By: Shubham Tiwari

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