What are the routes by which India gets FDI?

India gets its FDI through two routes - automatic and government. The former allows FDU without RBI or GOI’s prior approval, while the latter requires prior approval.

What are the countries from which India received most of its FDI?

India received most of its FDI from Singapore, the US, Japan, Netherlands, and Mauritius.

What are some of the major sectors for India’s FDI?

Some of the major sectors for India’s FDI are Pharmaceuticals, Automotive, services, Infrastructure, etc.

Are there any industries where FDI in India is prohibited through all routes?

Yes. Some industries where FDI in India is prohibited through any routes are Lotteries, Atomic Energy, Agricultural activities, Housing activities, Tobacco industry, etc.

FDI Full Form: Know All About FDI Here!

By Amrit Gouda|Updated : December 23rd, 2021

6 upvote0 comments

FDI Full Form: FDI stands for Foreign Direct Investment. As the name suggests, any investment made by a company into a company not based in that country (i.e., a foreign country) is known as FDI. This is the investment directly made by an individual into shares and securities of another company operating in another state. Any company that makes FDI is called a multinational company(MNC) or a multinational enterprise (MNE).

It is also essential to know that the term FDI is not the same as foreign portfolio investment because, in the latter, investors passively hold another foreign company’s securities. In order to understand FDI better, one should know about lasting interest as only if an individual is considered to make an FDI if they establish a lasting interest. This is possible if they get about 10% of the firm’s voting power. India is considered the fifth-largest FDI in the world, according to data from the United Nations Conference.

Table of Content

1. History of FDI in India
2. Types of FDI

Read Full Article

History of FDI in India

FDI in India was introduced in 1991. The Foreign Exchange Management by Dr Manmohan Singh, India’s ex-finance minister, put this in place. In this year, the liberalization of the economy opened India to foreign investors.

It is true that opening India to new markets after the 1991 crisis opened over one crore job opportunities. However, India has changed its FDI policy due to the 2020 pandemic and to protect Indian companies. This policy, although it doesn’t restrict markets, puts all FDI under scrutiny by the government.

Types of FDI

The two main types of FDI are vertical and horizontal FDI. Apart from this, over time, two more FDIs have emerged.

Vertical FDI: If an expanding business moves into another country to a supply chain of a different level, then that is called vertical FDI. Here, the business overseas undertakes activities that are different but are still related to the main business.
Horizontal FDI: If a business expands its operations inland to another country, then it is called a horizontal FDI. Here, unlike a vertical FDI, in a horizontal FDI, the business undertakes the same activities in a foreign country.
Platform FDI: A business expanding into another country exports its output into a third country, then this investment is called platform investment.
Conglomerate FDI: A conglomerate FDI is one where a business undertakes business activities in a foreign country. However, because of the difficulty in penetrating a completely new country as it is an early market, this type of FDI is not common.

In India, FDI is a major source of economic development. Apart from knowing the full form of FDI, it is also important to know its types, routes, and how it started in India. We have more articles that will help you with some key terms.

Related Articles to Study:
OBC Full Form	CIBIL Full Form
LIC Full Form	IDBI Full Form
HSBC Full Form	NPCI Full Form
RBI Full Form	IOB Full Form
CRR Full Form	IDFC Full Form

Join GA Foundation Online Classroom Program for all Bank and Insurance exams.

Click here to access Test Series

Also, Read:

Important Full Forms, Know Complete Details:
TSCAB Full Form	ATM Full Form	UPI Full Form
NEFT Full Form	KYC Full Form	MICR Full Form
RTGS Full Form	EMI Full Form	NSDL Full Form
HDFC Full Form	IBPS Full Form	AMEX Full Form
NABARD Full Form	INR Full Form	PFMS Full Form
ICICI Full Form	IFSC Full Form	ECS Full Form

Why BYJU'S Exam Prep Test Series?

Unlimited access to 18+ Bank and Insurance Exam mock tests
Mock Tests designed by Exam Experts.
Detailed Performance Analysis.

Download the BYJU’S Exam Prep App Now.

The most comprehensive exam prep app.

#DreamStriveSucceed

Comments

write a comment

FAQs

What are the routes by which India gets FDI?
India gets its FDI through two routes - automatic and government. The former allows FDU without RBI or GOI’s prior approval, while the latter requires prior approval.
What are the countries from which India received most of its FDI?
India received most of its FDI from Singapore, the US, Japan, Netherlands, and Mauritius.
What are some of the major sectors for India’s FDI?
Some of the major sectors for India’s FDI are Pharmaceuticals, Automotive, services, Infrastructure, etc.
Are there any industries where FDI in India is prohibited through all routes?
Yes. Some industries where FDI in India is prohibited through any routes are Lotteries, Atomic Energy, Agricultural activities, Housing activities, Tobacco industry, etc.