Foreign Direct Investment(FDI) :
Foreign Direct Investment(FDI) Meaning: Foreign direct investment (FDI) refers to long term participation by country A into country B. It usually involves participation in management, joint-venture, transfer of technology and "know-how".
A direct investment that allows the investor a controlling
intrest in a foreign company .It may take the form of a joint venture or a wholly owned subsidiary.
Joint Venture : A joint venture is a shared ownership in a
foreign business. The ventures is 50-50 ownership in which
there are two are 2 parties each of which hold a 50% ownership
stake and contributes a team of managers to share operating control.
Wholly Owned Subsidiary : In a wholly owned subsidiary , the company owns 100% of the equity. At present there are 733 wholly owned Indian subsidiaries , out of which 216 are in operations and 517 are at various stages implementation. :
Wholly Owned Subsidiary : In a wholly owned subsidiary , the company owns 100% of the equity. At present there are 733 wholly owned Indian subsidiaries , out of which 216 are in operations and 517 are at various stages implementation. Two ways to set up wholly
owned subsidiary are:-
a)Green Field Investment
b) Acquire a establish Firm There are two types of FDI:
Inward foreign direct investment
Outward foreign direct investment,
Resulting in a net FDI inflow (positive or negative).
Nature of FDI :
Nature of FDI RBI automatic approval for equity holding upto 51%
Foreign Investment Promotion Board’s discretaniory approval route for larger projects with equity holdings greater
than51%
NRI Schemes
Factor Influencing FDI :
Factor Influencing FDI
Factor Influencing FDI in India :
Factor Influencing FDI in India
PortFolio Investment :
PortFolio Investment Foreign Institutional Investors (FIIs) are allowed to invest in India in the securities traded in both primary and secondary capital markets. These securities include shares, debentures, warrants, and units of mutual funds, government securities .
The term FII is defined as an institution established or incorporated outside India for making investment in Indian securities and also includes a sub-account of an FII. FIIs include Asset Management Companies, Pension Funds, Mutual Funds, Investment Trust as nominee companies.