FOREIGN INVESTMENT IN INDIA AND ABROAD
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One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
What is the primary legislation governing foreign investment in India?
The Foreign Exchange Management Act (FEMA), 1999 is the primary legislation governing foreign investment in India, replacing the earlier FERA, 1973.
What is the full form of FEMA which governs foreign exchange transactions in India?
Foreign Exchange Management Act, enacted in 1999.
What does FDI stand for in the context of foreign investment in India?
FDI stands for Foreign Direct Investment, which refers to investment made by a non-resident entity or person in the equity capital of an Indian company with the intent of long-term business interest.
What replaced FERA in India and in which year?
FEMA replaced FERA in 1999, shifting focus to management.
What is the Automatic Route for FDI in India?
Under the Automatic Route, foreign investors do not require prior approval from the Government or RBI to invest; they only need to report the investment to the RBI within 30 days of receipt of funds.
What is the maximum FDI permissible in the insurance sector in India?
100% FDI is permitted in the insurance sector.
What is the Government Route (Approval Route) for FDI?
Under the Government Route, foreign investors must obtain prior approval from the competent authority (DPIIT or relevant ministry) before making an investment in sectors that are not under Automatic Route.
What is meant by 'downstream investment' in the context of FDI?
Investment by an Indian entity with foreign investment into another Indian company.
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