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    Types of Foreign Investment in India

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    Foreign investment in India can take three main forms: foreign direct investment, foreign portfolio investment, and foreign institutional investment. Foreign direct investment involves controlling ownership in an Indian business through establishing new operations, mergers, or acquisitions. Foreign portfolio investment is non-controlling investment in Indian stocks, bonds, and other securities. Foreign institutional investment also involves non-controlling investment in securities and assets by foreign mutual funds and hedge funds seeking to diversify portfolios.

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    Types of Foreign Investment in India

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    asima
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    Foreign investment in India can take three main forms: foreign direct investment, foreign portfolio investment, and foreign institutional investment. Foreign direct investment involves controlling ownership in an Indian business through establishing new operations, mergers, or acquisitions. Foreign portfolio investment is non-controlling investment in Indian stocks, bonds, and other securities. Foreign institutional investment also involves non-controlling investment in securities and assets by foreign mutual funds and hedge funds seeking to diversify portfolios.

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    Foreign investment in India can take three main forms: foreign direct investment, foreign portfolio investment, and foreign institutional investment. Foreign direct investment involves controlling ownership in an Indian business through establishing new operations, mergers, or acquisitions. Foreign portfolio investment is non-controlling investment in Indian stocks, bonds, and other securities. Foreign institutional investment also involves non-controlling investment in securities and assets by foreign mutual funds and hedge funds seeking to diversify portfolios.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views2 pages

    Types of Foreign Investment in India

    Uploaded by

    asima
    Foreign investment in India can take three main forms: foreign direct investment, foreign portfolio investment, and foreign institutional investment. Foreign direct investment involves controlling ownership in an Indian business through establishing new operations, mergers, or acquisitions. Foreign portfolio investment is non-controlling investment in Indian stocks, bonds, and other securities. Foreign institutional investment also involves non-controlling investment in securities and assets by foreign mutual funds and hedge funds seeking to diversify portfolios.

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    Types of Foreign Investment in

    India
    Any investment that is made in India with the source of funding that is from outside
    of India is a foreign investment. By this definition, the investments that are made by
    Foreign Corporates, Foreign Nationals, as well as Non-Resident Indians would fall
    into the category of Foreign Investment.

    Types of Foreign Investments


    Funds from foreign country could be invested in shares, properties, ownership /
    management or collaboration. Based on this, Foreign Investments are classified as
    below.

     Foreign Direct Investment (FDI)


     Foreign Portfolio Investment (FPI)
     Foreign Institutional Investment (FII)

    Details on each of the foreign investment type can be found below :

    Foreign Direct Investment (FDI)


    FDI is an investment made by a company or individual who us an entity in one
    country, in the form of controlling ownership in business interests in another
    country. FDI could be in the form of either establishing business operations or by
    entering into joint ventures by mergers and acquisitions, building new facilities etc.

    Know more about FDI in Company and FDI in LLP.

    Foreign Portfolio Investment (FPI)


    Foreign Portfolio Investment (FPI) is an investment by foreign entities and non-
    residents in Indian securities including shares, government bonds, corporate bonds,
    convertible securities, infrastructure securities etc. The intention is to ensure a
    controlling interest in India at an investment that is lower than FDI, with
    flexibility for entry and exit.

    Foreign Institutional Investment (FII)


    Foreign Portfolio Investment (FPI) is an investment by foreign entities in securities,
    real property and other investment assets. Investors include mutual fund
    companies, hedge fund companies etc. The intention is not to take controlling
    interest, but to diversify portfolio ensuring hedging and to gain high returns with
    quick entry and exit.

    The differences in FPI and FII are mostly in the type of investors and hence the
    terms FPI and FII are used interchangeably.

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