Q78.
Which of the following would include Foreign Direct Investment in India? 1. Subsidiaries of foreign companies in India. 2. Majority foreign equity holding in Indian companies. 3. Companies exclusively financed by foreign companies. 4. Portfolio investment. Select the correct answer using the codes given below:
Answer
D
Explanation
FDI includes: (1) Subsidiaries of foreign companies (wholly owned foreign enterprise), (2) Majority foreign equity holding in Indian companies (controlling interest), and (3) Companies exclusively financed by foreign companies (joint ventures or fully foreign-funded). Portfolio investment (statement 4) is NOT FDI — it is Foreign Portfolio Investment (FPI/FII), which involves purchasing shares/bonds without management control. The key distinction: FDI involves ownership and management control; FPI does not.