Which one of the following would be considered as Foreign Direct Investment ?
A foreign company buying shares in stock exchanges in India
A foreign country pension fund investing in Indian stock markets
A foreign merchant banker buying shares from Indian stock markets
A foreign entity setting up an educational institution in India
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CDS-1 – 2022
– Options A, B, and C describe portfolio investment, which involves buying shares purely for financial return without seeking management control. Investing in stock markets (unless it’s a significant stake aiming for control) is typically portfolio investment.
– Option D, setting up a new educational institution, involves creating physical infrastructure, employing staff, and operating a business in India, representing a clear instance of greenfield FDI.