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:
Detailed Explanation:
✅ Statement 1 – Correct: Subsidiaries established by foreign companies in India represent FDI as they involve lasting interest and management control.
✅ Statement 2 – Correct: Majority foreign equity holding (typically 10% or more) in Indian companies constitutes FDI as it enables effective voice in management.
✅ Statement 3 – Correct: Wholly Owned Subsidiaries (WOS) that are exclusively financed by foreign entities are a direct form of FDI with 100% foreign ownership.
❌ Statement 4 – Incorrect: Portfolio investment (FPI) involves purchase of securities without management control, distinguished from FDI which requires long-term interest and control.
Question 5 of 5 FDI and FPI
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