Definition of FDI
Investment made by person of one country in to another country for the purpose of business. In other words FDI means taking control in ownership of a business in a country by an entity based in another country.
It may in the form of mergers and acquisitions, joint venture, transfer of technology, ploughing back of profit earned from foreign operations.
Types of FDI
1. Horizontal FDI: When an entity of one country open the same value chain stage business in another country through FDI.
2. Platform FDI: Foreign direct investment from first country into a second country for the purpose of exporting to a third country.
3. Vertical FDI: When an entity of one country established the business at different stage of production in another country through FDI.
There are two routes of FDI in India
1. Automatic route: In this route FDI is allowed and no prior approval of Government or Reserve Bank of India is required.
2. Government route: Under this route prior approval by Government is necessary. Foreign Investment Facilitation Portal is a single window for clearance of FDI application.
According to Annual Report of Reserve Bank of India (RBI)
|Date : Aug 29, 2018
|Foreign Direct Investment Flows to India: Country-wise and Industry-wise