Economy2012
Which of the following would include Foreign Direct Investment in India?
- Subsidiaries of foreign companies in India.
- Majority foreign equity holding in Indian companies.
- Companies exclusively financed by foreign companies.
- Portfolio investment.
Select the correct answer using the codes given below:
Explanation
The correct option includes 1 (Subsidiaries of foreign companies in India), 2 (Majority foreign equity holding in Indian companies), and 3 (Companies exclusively financed by foreign companies) because these denote Foreign Direct Investment (FDI) which involves establishing business operations in India or acquiring a significant ownership stake, thereby implying a long-term interest. In contrast, portfolio investment (option 4) refers to investing in financial assets like stocks and bonds without the intent of establishing a lasting interest, thus it does not constitute FDI. This distinction is crucial in understanding international economic frameworks and investment flows, which are relevant topics in the UPSC GS Paper I syllabus.
