What do you mean by automatic route for foreign investment?

What is automatic route in FEMA?

5.1. 1 Automatic Route is the entry route through which investment by a person resident outside India does not require the prior Reserve Bank approval or Government approval. 5.1. 2 Government Route is the entry route through which investment by a person resident outside India requires prior Government approval.

What are the 4 types of foreign direct investment?

Types of FDI

  • Horizontal FDI. The most common type of FDI is Horizontal FDI, which primarily revolves around investing funds in a foreign company belonging to the same industry as that owned or operated by the FDI investor. …
  • Vertical FDI. …
  • Vertical FDI. …
  • Conglomerate FDI. …
  • Conglomerate FDI. …
  • Platform FDI. …
  • Platform FDI.

What are the two routes of FDI in India?

Foreign investment is freely permitted in almost all sectors. Foreign Direct Investments (FDI) can be made under two routes—Automatic Route and Government Route. Under the Automatic Route, the foreign investor or the Indian company does not require any approval from RBI or Government of India for the investment.

What is FDI inflow route in India?

FDI ENTRY ROUTES INTO INDIA

  • Category 1. 100% FDI Permitted through. Automatic Route.
  • Category 2. UPTO100% FDI Permitted through. Government Route.
  • Category 3. UPTO100% FDI Permitted through. Government + Automatic Route.
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What is automatic route and Government route?

FDI under sectors is permitted either through the Automatic route or Government route. Under the Automatic Route, the non-resident or Indian company does not require any approval from the Government of India. Whereas, under the Government route, approval from the Government of India is required prior to investment.

What is meant by foreign investment foreign direct investment and foreign portfolio investment?

Key Takeaways. Foreign portfolio investment is the purchase of securities of foreign countries, such as stocks and bonds, on an exchange. Foreign direct investment is building or purchasing businesses and their associated infrastructure in a foreign country.

What do you mean by foreign investment?

Key Takeaways. Foreign investment refers to the investment in domestic companies and assets of another country by a foreign investor. Large multinational corporations will seek new opportunities for economic growth by opening branches and expanding their investments in other countries.