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Economy2012
Which of the following would include Foreign Direct Investment in India?
  1. Subsidiaries of foreign 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:

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.

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