Foreign Investment in India
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Compliance Professional — Banking Compliance Professional.
One-liners from this chapter
Free sample — 8 of 66 rapid-fire Q&A cards.
Which government body regulates foreign investment in India under the Foreign Exchange Management Act?
The Reserve Bank of India (RBI) regulates foreign investment in India under FEMA 1999, with policy oversight provided by the Department for Promotion of Industry and Internal Trade (DPIIT).
What is the full form of FEMA in the context of Indian foreign investment law?
Foreign Exchange Management Act, enacted in 1999.
What is the difference between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)?
FDI involves a lasting interest and significant influence in an enterprise (typically 10% or more equity), while FPI involves investment in securities (stocks, bonds) without management control, generally below 10% stake.
Which ministry administers India's FDI policy in coordination with the Reserve Bank of India?
Ministry of Finance and Ministry of Commerce and Industry.
Under which route can foreign investors invest in Indian companies without prior government approval?
Foreign investors can invest under the Automatic Route without prior RBI or government approval, subject to sectoral caps and conditions prescribed in the FDI policy.
What is the Automatic Route for FDI in India?
FDI allowed without prior RBI or government approval.
What is the Government Route for FDI in India?
The Government Route requires prior approval from the Foreign Investment Facilitation Portal (FIFP) administered by DPIIT before making investments in sectors where automatic route is not available.
What instrument does the Indian government use to announce changes in FDI sectoral policy?
Press Notes issued by the Department for Promotion of Industry.
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