Foreign Direct Investment: UPSC Daily Important Topic | 15 January 2022

FDI

• FDI’ or ‘Foreign Direct Investment’ means investment through capital instruments by a person resident outside India

• in an unlisted Indian company OR

in ten per cent or more of the post-issue paid-up equity capital on a fully diluted basis of a listed Indian company.

• In India, foreign investment can be made mainly under two routes:

✓Automatic Route: Under the Automatic Route, the non-resident investor or the Indian company does not require any approval from Government of India for the investment. Reserve Bank of India is in charge of Automatic Route.

✓Government Approval Route: Under the Government Approval Route, prior to investment, approval from the Government of India is required. Proposals for foreign direct investment under Government route, are considered by respective Administrative Ministry/ Department.