Question

Which of the following would include Foreign Direct Investment in India? Select the correct answer.

1. Subsidiaries of companies in India

2. Majority foreign equity holding in Indian companies

3. Companies exclusively financed by foreign companies

4. Portfolio investment

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

Answer 1

The correct option is D 1, 2 and 3 only

Following include Foreign Direct Investment in India

• Subsidiaries of companies in India: which means the Indian company with voting stock that is more than 50% controlled by a foreign company.
  
• Majority foreign equity holding in Indian companies: Equity holding is a holding of the nominal share in a company where the shareholding entitles the shareholder to a right to vote, to profits available and to assets available for distribution on a winding up of that company.
  
• Companies exclusively financed by foreign companies: this means that the Indian company which is completely financed by a foreign organisation or a company.