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    Question

     With reference to the Foreign Direct Investment (FDI)

    in India, which of the following statements is/are correct? 1. FDI limit for each sector is set by the Reserve Bank of India. 2. If the percentage of FDI holding in a company is reduced, then the FDI holdings will be reclassified as Foreign Portfolio Investment. 3. Foreign Direct Investment , or FDI, is one of the most crucial channels of direct investments between countries. Select the correct answer using the codes given below:
    A 1 only Correct Answer Incorrect Answer
    B 2 only Correct Answer Incorrect Answer
    C 3 only Correct Answer Incorrect Answer
    D Both 1 & 2 Correct Answer Incorrect Answer
    E Both 1 & 3 Correct Answer Incorrect Answer

    Solution

    FDI was gradually allowed in almost all sectors, except a few, on the grounds of strategic importance, subject to compliance with sector-specific rules and regulations.  Foreign Direct Investment , or FDI, is one of the most crucial channels of direct investments between countries.

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