Singapore & USA Becomes Highest FDI Contributor In India

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FDI Vs FPI

When investment is made with an intent of obtaining an ownership stake in a foreign country- FDI.
In FDI investment is done through transfers of funds, resources, technology etc.
When the investment is made in the financial assets of a company in foreign country- FPI.
In FPI investment is done through stock, bonds, etc.

In automatic route, foreign investor does not require any approval from Government of India for the investment.
In approval route, foreign investor should obtain prior approval from the Government of India for investment.
Certain limits are also placed in different sectors for approval route.

In automatic route, foreign investor does not require any approval from Government of India for the investment.
In approval route, foreign investor should obtain prior approval from the Government of India for investment.
Certain limits are also placed in different sectors for approval route.

The US has emerged as the second biggest source of foreign direct investment (FDI) into India,
Replacing Mauritius, during the first half of the current financial year, according to data of the commerce and industry ministry.
So far this financial year, Singapore and The United States of America have been the biggest contributors towards
FDI equity inflows to India.
Data published by the Department for Promotion of Industry and Internal Trade (DPIIT) shows that Singapore has invested Rs 62,084 crore into India between April and September 2020.
This was followed by the USA with Rs 53,266 crore of inflows.

Foreign Direct Investment (FDI) is considered as a major source of non-debt financial resource for the economic development.
FDI flows into India have grown consistently since liberalization and are an important component of foreign capital since FDI infuses long term sustainable capital in the economy.
It thus contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation amongst other benefits.

Q) A surge in foreign capital inflow in India would lead to?

Sale of foreign exchange by the central bank in order to prevent depreciation of rupee
Purchase of foreign exchange by central bank in order to prevent depreciation of rupee
Sale of foreign exchange by the central bank in order to prevent appreciation of rupee
Purchase of foreign exchange by central bank in order to prevent appreciation of rupee