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Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?
- a)FII helps bring better management skills and technology. While FDM only brings in capital.
- b)FII helps in increasing capital availability in general, while FDI only targets specific.
- c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.
- d)FII is considered to be more stable than FDI.
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Both foreign direct investment (HDI) and foreign institutional investo...
Does India need more foreign direct investment?
India doesn't need FDI. To get FDI, you have to install infrastructure first. China is getting 10 times more FDI than India because they have invested in roads and bridges and airports.
Why do you say India doesn't need FDI?
You need infrastructure to manage incoming FDI. You need clear policy.
FDI is not needed in India because we are getting more money from the FIIs. We are getting around $12 billion from them. They are buying in secondary markets and that money gets into the Indian economy. While India gets around FDI worth $5 billion, China gets around $50 billion. They don't have our types of stockmarkets. So FIIs are absent there. In India, when FIIs pump in $12 billion, it means a few Indians have sold their shares to them (the FIIs), so that free cash gets invested somewhere within India by Indians. That money goes into land, buying of new stocks and into banks.
India doesn't need FDI. To get FDI, you have to install infrastructure first. China is getting 10 times more FDI than India because they have invested in roads and bridges and airports.
Why do you say India doesn't need FDI?
You need infrastructure to manage incoming FDI. You need clear policy.
FDI is not needed in India because we are getting more money from the FIIs. We are getting around $12 billion from them. They are buying in secondary markets and that money gets into the Indian economy. While India gets around FDI worth $5 billion, China gets around $50 billion. They don't have our types of stockmarkets. So FIIs are absent there. In India, when FIIs pump in $12 billion, it means a few Indians have sold their shares to them (the FIIs), so that free cash gets invested somewhere within India by Indians. That money goes into land, buying of new stocks and into banks.
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Both foreign direct investment (HDI) and foreign institutional investo...
Difference between FDI and FII
Foreign direct investment (FDI) and foreign institutional investor (FII) are two important forms of investment in a country. The following are the differences between the two:
1. Definition: FDI is an investment made by a foreign company in the form of either establishing a new business or acquiring an existing business in a foreign country. FII, on the other hand, is an investment made by foreign investors in the financial markets of a country.
2. Purpose: FDI is primarily aimed at acquiring ownership and control of the business in which the investment is made. FII, on the other hand, is aimed at earning profits from the financial markets of the country.
3. Target: FDI targets specific sectors such as manufacturing, infrastructure, and services, whereas FII targets general capital availability in the financial markets.
4. Nature of investment: FDI involves a long-term investment, and the investor has a significant say in the management of the business. FII, on the other hand, involves short-term investment, and the investor has no say in the management of the business.
5. Benefits: FDI brings in capital, technology, and better management skills, which helps in the overall development of the country. FII brings in liquidity to the financial markets, which helps in increasing capital availability.
Conclusion
Thus, the best statement that represents an important difference between FDI and FII is that FII helps in increasing capital availability in general, while FDI only targets specific sectors.
Foreign direct investment (FDI) and foreign institutional investor (FII) are two important forms of investment in a country. The following are the differences between the two:
1. Definition: FDI is an investment made by a foreign company in the form of either establishing a new business or acquiring an existing business in a foreign country. FII, on the other hand, is an investment made by foreign investors in the financial markets of a country.
2. Purpose: FDI is primarily aimed at acquiring ownership and control of the business in which the investment is made. FII, on the other hand, is aimed at earning profits from the financial markets of the country.
3. Target: FDI targets specific sectors such as manufacturing, infrastructure, and services, whereas FII targets general capital availability in the financial markets.
4. Nature of investment: FDI involves a long-term investment, and the investor has a significant say in the management of the business. FII, on the other hand, involves short-term investment, and the investor has no say in the management of the business.
5. Benefits: FDI brings in capital, technology, and better management skills, which helps in the overall development of the country. FII brings in liquidity to the financial markets, which helps in increasing capital availability.
Conclusion
Thus, the best statement that represents an important difference between FDI and FII is that FII helps in increasing capital availability in general, while FDI only targets specific sectors.
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Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer?
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Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer?.
Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Both foreign direct investment (HDI) and foreign institutional investor (FII) are related to investment in a country. Which one of the following statements best represents an important difference between the two?a)FII helps bring better management skills and technology. While FDM only brings in capital.b)FII helps in increasing capital availability in general, while FDI only targets specific.c)FDI flows only into the secondary market, in general, while FDI only targets specific sectors.d)FII is considered to be more stable than FDI.Correct answer is option 'B'. Can you explain this answer?.
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