Q.What is Foreign Direct Investment (FDI)?

When a foreign investor puts money into a business with the aim of actually running or controlling it, rather than just holding its shares, that specific kind of investment has its own name. …

Foreign Direct Investment (FDI) refers to an investment made by a person, company or institution resident in one country into a business enterprise located in another country, with the specific intention of gaining a lasting management interest and a significant degree of control or influence over that enterprise. This is typically achieved by setting up a new business venture abroad, acquiring a controlling stake in an existing foreign company, or expanding an already-established foreign-owned business. FDI is the principal route through which Multi-National Corporations enter a host country such as India, and it is treated as more stable than short-term foreign investment in shares because it represents a long-term commitment to physi …

Students often define FDI simply as "foreign money coming into the country," which fails to distinguish it from Foreign Portfolio Investment (FPI); the key element examiners look for is the inten …