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Foreign Direct Investment
Asked 2 times in UPSC Prelims · first asked 2003 · last asked 2020
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With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristics?
2020Economy
With reference to Foreign Direct Investment in India, which one of the following is considered its major characteristics?
Explanation
Foreign Direct Investment (FDI) in India is characterized by a significant equity investment of over 10% by a foreign entity in an Indian company. This type of investment does not involve debt creation or borrowing, distinguishing it from options (c) and (d). For example, Walmart's substantial investment in Flipkart, which is not a listed company, demonstrates that FDI is not limited to listed companies as mentioned in option (a).
With reference to Government of India's decision regarding Foreign Direct Investment (FDI) during the year 2001-02 consider the following statements: 1. Out of the 100% FDI allowed by India in the tea sector the foreign firm would have to disinvest 33% of the equity in favour of an Indian partner within four years 2. Regarding the FDI in print media in India, the single largest Indian shareholders should have a holding higher than 26% Which of these statements is/are correct?
2003Economy
With reference to Government of India's decision regarding Foreign Direct Investment (FDI) during the year 2001-02 consider the following statements: 1. Out of the 100% FDI allowed by India in the tea sector the foreign firm would have to disinvest 33% of the equity in favour of an Indian partner within four years 2. Regarding the FDI in print media in India, the single largest Indian shareholders should have a holding higher than 26% Which of these statements is/are correct?
Explanation
In 2001-02, the Government of India made a decision regarding Foreign Direct Investment (FDI) regulations. The first statement indicates that in the tea sector, while 100% FDI was allowed, foreign firms were required to divest 33% of their equity to an Indian partner within four years. The second statement mentions that for FDI in the print media sector, the largest Indian shareholder must hold more than 26% of the shares. Both of these statements are correct, as per the Government's regulations at that time. Additionally, it was noted that the FDI limit in print media was initially set at 26%, but there was a proposal to potentially increase this limit to 49% in the future.