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What is the full form of FDI?

FDI: Foreign Direct Investment

The full form of FDI is Foreign Direct Investment. It is the direct investment into a business by an individual or company based in one country, into an entity or company based in another country. It differs from portfolio flow wherein a foreign company invests in the equities listed on the stock exchange of a country. Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.

FDI full form

Broadly, foreign direct investment (FDI) includes mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans. In a narrow sense, foreign direct investment refers just to building a new facility, and a lasting management interest i.e. 10 percent or more of voting stock in an enterprise operating in an economy other than that of the investor. FDI is usually made into countries that have open economies, high growth prospects and skilled workforce at relatively cheap rates like India.

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