Question

Which of the following would include Foreign Direct Investment in India?
1) Subsidiaries of companies in India.
2) Majority foreign equity holding in Indian companies.
3) Companies exclusively financed by foreign companies.
4) Portfolio investment.
Select the correct answer using the codes given below.

• A. 1 , 2 , 3 and 4
• B. 2 and 4
• C. 1 and 3
• D. 1 , 2 and 3

Answer 1

The correct option is D 1 , 2 and 3

Portfolio investment doesn't mean direct investment. It refers to investment in the security markets in India.

Subsidiaries of a company come under Direct Investment. Majority equity holding and exclusively financing a company in India leads to getting some control in management or taking part in operations and is thus Direct Investment.