Which of the following correctly evaluates the two statements regarding India's Foreign Direct Investment policy?
Statement I: The Government of India permits Foreign Direct Investment under either the Automatic Route or the Government Route, depending on the sector.
Statement II: Investment proposals under the Government Route require prior approval from the competent authority before investment is made.
Both Statement I and Statement II are correct
India allows foreign direct investment through two channels. Under the Automatic Route, the investor does not need any prior permission from the Government or the Reserve Bank of India; it only reports the investment afterwards.
Under the Government Route, the proposal must first be cleared by the concerned administrative ministry or department (the competent authority) before the money comes in. Which route applies depends on the sector and the level of foreign holding.
So Statement I correctly describes the two routes and Statement II correctly describes the prior-approval condition of the Government Route. Both statements are correct.
Hence, Both Statement I and Statement II are correct.
Important Questions from External Sector
Which of the following best describes the term 'import cover', sometimes seen in the news?
With reference to Balance of Payments, which of the following constitutes/constitute the Current Account?
(1) Balance of trade
(2) Foreign assets
(3) Balance of Invisibles
(4) Special Drawing Rights
Select the correct answer using the code given below.
Consider the following actions which the Government can take:
1) Devaluing the domestic currency.
2) Reduction in the export subsidy.
3) Adopting suitable policies which attract greater FDI and more funds from FIIs.
Which of the above action/actions can help in reducing the current account deficit?
Both Foreign Direct Investment (FDI) 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?
Which one of the following groups of items is included in India’s foreign-exchange reserves?
