Indian Economy

Which of the following would include Foreign Direct Investment in India?

  • 1. Subsidiaries of 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:

  1. 1, 2, 3 and 4
  2. 1, 2 and 3 only
  3. 2 and 4 only
  4. 1 and 3 only

Answer

Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.

The correct option is B.