Foreign Direct Investment (FDI)
5paisa Research Team
Last Updated: 11 Apr, 2025 12:29 PM IST

Content
- What Is a Foreign Direct Investment (FDI)?
- How Does Foreign Direct Investment (FDI) Work?
- Types of Foreign Direct Investment
- Examples of Foreign Direct Investment
- Difference between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI)
- Methods of Foreign Direct Investment
- FDI Advantages and Disadvantages
- Permissible sectors for FDI in India
- Which are Prohibited Sectors under FDI
- What are Reporting Requirements under FDI?
Investments make or break a company's economic progression. While a company that receives substantial investment can work on building a better team and deliverables, the investing company also looks at certain factors that would ensure that its investment will have a profitable return on investments (ROI). Foreign direct investment, or FDI, is one such avenue that helps both companies to thrive.
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Frequently Asked Questions
Economic progress is facilitated by foreign direct investment. It is main source of foreign funding & increased earnings for nation. It usually leads to construction of factories in nation receiving investment, utilizing some local labor and/or equipment.
The following industries are currently exempt from FDI under existing policy: gaming & betting. Lottery operations (such as online lotteries, government/private lotteries, & so on) Investments by private sector are not permitted in some activities or industries (such as railroads or nuclear energy).
For FDI investment investor typically chooses sector, follows country's FDI regulations, & decides between automatic or government routes. process involves registering company, obtaining necessary approvals, & complying with legal & financial requirements to facilitate investment.