# Foreign Direct Investment (FDI) in India: Framework & FIPB
> A comprehensive guide to FDI in India, covering FIPB roles, automatic vs. government routes, sectoral limits, and the key differences between FDI and FPI.

Tags: fdi-india, foreign-direct-investment, fipb, fpi-vs-fdi, economic-policy, finance, investment-routes
## Foreign Direct Investment (FDI): Comprehensive Overview
- Definition: Long-term commitment with ≥10% ownership and significant influence.
- Key features: Technology transfer, skills development, and cross-border control.

## Types and Forms of FDI
- Greenfield: Building new facilities.
- Brownfield: Acquiring existing facilities via M&A.
- Entry Modes: Wholly Owned Subsidiaries (WOS), Joint Ventures (JV), and Strategic Alliances.

## Historical Evolution in India
- 1991: Economic Liberalization & Automatic Route.
- 1996: FIPB established.
- 2017: FIPB abolished to ease bureaucratic delays.
- Data: India received USD 83.57 Billion in FDI in FY 2021-22, the highest ever.

## FIPB and Approval Routes
- Automatic Route: No prior government approval; notification to RBI required (~95% of sectors).
- Government Approval Route: Required for sensitive sectors like Defence (>74%) and Multi-brand Retail.
- Post-2017: Administrative Ministries handle approvals via DPIIT nodal authority.

## Sectoral Caps and Limits
- 100% (Automatic): Agriculture, Telecom, Broadcasting (DTH).
- 74%: Private Banking, Insurance.
- 51% (Government): Multi-brand Retail.
- 0% (Prohibited): Atomic Energy, Lottery, Gambling, Tobacco manufacturing.

## FDI vs Foreign Portfolio Investment (FPI)
- FDI: Long-term, strategic, active control, ≥10% stake.
- FPI: Short-term, passive, high liquidity, <10% stake in securities.
- Statistics: FPI inflows stood at ₹1.71 Lakh Crore in FY2023-24.

## Trends and Statistics
- FDI Inflows: FY22 reached a peak of $83.6 Billion.
- Top Sectors: Computer Software & Hardware (25%), Services (16%), Telecommunications (6%).
- Top Sources: Mauritius, Singapore, USA, Netherlands, Japan.

## Regulatory Framework
- Legislation: FEMA 1999, Companies Act 2013, SEBI Act 1992.
- Institutions: DPIIT, RBI, SEBI, and Sectoral Regulators.
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