FDI And FII In India

Sir I am hearing a lot of about the investment in India so I want clear the difference about the FDI and FII so can you please tell me the same

[Kiran Chandar]

FDI (Foreign Direct Investment) is when a foreign company invests in India directly by setting up a wholly owned subsidiary or getting into a joint venture, and conducting their business in India.

FII is when foreign investors invest in the shares of a company that is listed in India, or in bonds offered by an Indian company. So, if a foreign investor buys shares in Infosys then that qualifies as FII Investment.

I am giving you the details for both of them


Foreign Institutional Investment (FII)

Foreign Institutional Investor‘(FII) means an entity established or incorporated outside
India which proposes to make investment in India and which is registered as a FII in
accordance with the SEBI (FII) Regulations 1995.


FII denotes all those investors or investment companies that are not located within the
territory of the country in which they are investing.

“SEBI’s definition of FIIs presently includes foreign pension funds, mutual funds,
charitable/endowment/university funds etc. as well as asset management companies and
other money managers operating on their behalf.


FDI

FDI stands for Foreign Direct Investment, a component of a country’s national financial
accounts.

Foreign direct investment is investment of foreign assets into domestic structures,
equipment, and organizations.

It does not include foreign investment into the stock markets.

FDI is thought to be more useful to a country than investments in the equity of its
companies because equity investments are potentially “hot money” which can leave at the
first sign of trouble, whereas FDI is durable and generally useful whether things go well
or badly.

FDI‘ Means Investment By Non-resident Entity/Person Resident Outside India In The
Capital Of An Indian Company Under Schedule 1 Of Foreign Exchange Management
(Transfer Or Issue Of Security By A Person Resident Outside India)