Is foreign investment in stocks of considered FDI or not?
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According to this website,FDI definition doesn't include equity investment. So, just want to confirm. http://economics.about.com/cs/economicsglossary/g/fdi.htm
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Answer:
The website is right. FDI includes only investments made in physical assets - factories, properties, retail chains, etc. FDI investors do an active management in the resulting enterprise. Investments in equities and other securities are usually termed as Portfolio Investments.FPI investors don't bother much about management. Mostly their objective is to obtain Financial gain through market movement.
Gunaseelan Mani at Quora Visit the source
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