Question

Consider the following statements about FDI entry.
$1$. The automatic route stands for less restricted or more liberalized regulation.
$2$. Approval route/Government route means that Investment in the capital of resident entities by non-resident entities can be made only with the prior approval of Ministry of Finance (GoI).
Which of the given statements is/are correct?

• A. $1$ only
• B. $2$ only
• C. Both $1$ and $2$
• D. None of the above

Answer 1

The correct option is A $1$ only

There are two ways of FDI entry - automatic and approval route. The automatic route stands for less restricted or more liberalized regulation. Reserve Bank of India is the competent authority for investment under automatic route. Approval route/Government route means that investment in the capital of resident entities by non-resident entities can be made only with the prior approval of Government (Competent Ministry/Department for grant of approval).