Foreign Direct Investment (FDI) :

It refers to Cross-border investment made by a resident in one economy with the objective of establishing a lasting interest in an enterprise.

According to IMF and OECD definitions, the acquisition of at least ten per cent of the ordinary shares or voting power in a public or private enterprise by non-resident investors makes it eligible to be categorized as FDI. However, in India there is no such official guideline for FDI, though FII is defined in SEBI regulations:

To support the economic growth of a nation, on account of inadequate domestic capital, flow of foreign capital is encouraged through the channel- Foreign Direct Investment. Apart from the capital funds, the FDI also brings with it, other benefits like technical knowhow, business expertise and knowledge and other advantages.

FIPB: Functions:

The main functions of Foreign Investment Promotion Board are:

(a) Expedite clearance process, (b) periodically review implementation of cleared proposals, (c) Review general and sectoral policy guidelines, (d) undertake investment promotion activities.