Consider the following :
- 1.Foreign currency convertible bonds
- 2.Foreign institutional investment with certain conditions
- 3.Global depository receipts
- 4.Non-resident external deposits
Which of the above can be included in Foreign Direct Investments?
Show answer
Answer: A. Under India's FDI framework, foreign currency convertible bonds and global depository receipts that convert into equity are counted as foreign investment in Indian companies, and foreign institutional investment above set limits or with certain conditions can be counted as FDI. Non-resident external deposits are bank deposits, a debt flow, not FDI. So 1, 2 and 3.
Watch for: NRE deposits are foreign money coming in, but they are deposits, not investment in a company's equity.
Why the other options are wrong
- B. Wrong because FCCBs and FII with conditions are also included.
- C. Wrong because NRE deposits are bank deposits, not FDI.
- D. Wrong because NRE deposits are not FDI.
Source to check: DPIIT Consolidated FDI Policy; Foreign Exchange Management (Non-debt Instruments) Rules, 2019
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.