Welcome to visit here. In this article we are giving a 'Short Note on - FII and FDI'. Many aspirants are preparing for banking and other competitive exams, and many a times they read about the terms FII or FDI. Moreover, in news or in other related channels we usually read/listen about these terms. These terms are very important and very simple to understand. We are explaining these simple terms to understand at initial, owing to these terms, further we will put more terms about the banking and economy based on these.
FII and FDI:
FII (Foreign Institutional Investment): When foreign-players invest in shares and stock-market.
FDI (Foreign Direct Investment): When foreign companies invest in India for manufacturing, production, sales etc. by themselves or by partnering with some Indian firms.
Some key points to remember about these terms are:
1. FII can enter in the Stock Market easily and also withdraw from it easily. But FDI cannot enter and exit as easy as FII.
2. Foreign Direct Investment targets a specific enterprise. The FII looks for increasing capital availability in general.
3. The Foreign Direct Investment is considered to be more stable than Foreign Institutional Investor.
4. While the FDI flows into the primary market, the FII flows into secondary market.
5. While FIIs are short-term investments, and the FDI’s are long term investments.
We have explained this concept in simple language. In the next article we will discuss more important terms based on FII and FDI.
Thank you and Stay tuned with us.