Consider the following statements regarding Foreign Direct Investment in India(FDI):
1. FDI in India is regulated under the Foreign Exchange Management Act of 1999.
2. If an existing FDI investment falls below 10%, it continues to be treated as FDI.
3. In the past two decades FDI Inflows into India have always remained lower than Remittances.

Which of the above statements is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 only
(d) 1 ,2 and 3

Question

Consider the following statements regarding Foreign Direct Investment in India(FDI):
1. FDI in India is regulated under the Foreign Exchange Management Act of 1999.
2. If an existing FDI investment falls below 10%, it continues to be treated as FDI.​
3. In the past two decades FDI Inflows into India have always remained lower than Remittances.

Which of the above statements is/are correct?
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 only
(d) 1 ,2 and 3

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: FDI in India is governed by the Foreign Exchange Management Act (FEMA) of 1999. The Reserve Bank of India (RBI) has issued various notifications under FEMA to regulate foreign investments.

Statement 2 is correct: According to the operational framework issued by the RBI, once an investment is classified as FDI, it will continue to be treated as such even if the investment falls below the 10% threshold subsequently.

Statement 3 is correct: As per RBI bulletin of march 2025 FDI Inflows into India remains lower than Remittances since 2000.This trend underscores the significant role that remittances play in India's external sector, often exceeding FDI inflows over the past two decades.

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M Question 1	⏱ 0
Consider the following statements regarding Foreign Direct Investment in India(FDI): 1. FDI in India is regulated under the Foreign Exchange Management Act of 1999. 2. If an existing FDI investment falls below 10%, it continues to be treated as FDI. 3. In the past two decades FDI Inflows into India have always remained lower than Remittances. Which of the above statements is/are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 only (d) 1 ,2 and 3