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Methods of FDI and Sectors in Which It Is Prohibited

Methods of FDI and Sectors in Which It Is Prohibited

Simply put– Foreign Direct Investment is an investment in one country by an entity based in another country. The Indian government has over the years taken several measures to ease foreign direct investment policies in order to facilitate more overseas equity inflows into the country. This effort has made the country one of the most attractive destinations for FDI today. Apart from being a significant driver of economic growth, FDI also helps bring in more job opportunities, new technology, managerial…

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Two Routes of FDI

Two Routes of FDI

Foreign direct investment or FDI is an investment made by a foreign entity (an individual or a company) into a business based in another country. FDI is branded by a notion of direct control and is not just the transfer of monetary funds. A lasting interest differentiates foreign direct investment from foreign portfolio investment. An overseas investor looking to penetrate the India market can do so in the following ways: Mergers and Acquisitions Getting voting stocks in a business based…

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Explained: Types of FDI

Explained: Types of FDI

FDI or foreign direct investment is an investment made by a foreign entity (individual or firm) into a business based in another country. The biggest difference that distinguishes between foreign direct investment and foreign portfolio investment is the notion of ‘lasting interest.’ To cement a foreign investor’s lasting interest, they are given at least 10 per cent voting rights in the business. FDI investment in India is made under two routes- automatic and approval or government. While a prior permission…

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Ways a Foreign Investor Can Gain Voting Rights through FDI in an Indian Company

Ways a Foreign Investor Can Gain Voting Rights through FDI in an Indian Company

The Government of India has time and again liberalised Foreign Direct Investment policies and norms for NRI’s (non-resident Indian) and PIO’s (person of Indian origin) in order to encourage capital flows into the country. This decision has led to more investments and forex remittances in the country. Today, India is one the most attractive destinations for FDI thanks to relaxed norms and ease of doing business. According to the Department for the Promotion of Industry and Internal Trade (DPITT), as…

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Indian Sectors Where FDI Is Not Allowed

Indian Sectors Where FDI Is Not Allowed

Foreign direct investment or FDI is an investment by an entity based outside the country where the investment is being made. This type of transaction is characterized by a controlling ownership in the business of the domestic country. This ‘controlling ownership’ is ensured by giving foreign investors a lasting interest in the company by the means of at least 10 per cent voting rights. Therefore, foreign direct investment is differentiated from foreign portfolio investment on the grounds of lasting interest…

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