Question

For which of the following 100 % FDI is not allowed?

i. Activities / items that require an Industrial License

ii. Setting up of Industrial Parks

iii. Setting up Export Oriented Unit

iv. Acquisition of shares in an existing Indian company by a foreign / NRI investor

A Only i & ii Correct Answer Incorrect Answer
B Only i & iii Correct Answer Incorrect Answer
C Only ii & iii Correct Answer Incorrect Answer
D Only i & iv Correct Answer Incorrect Answer
E All of these Correct Answer Incorrect Answer

Solution

FDI up to 100% is allowed under the automatic route in all activities / sectors except the following which will require approval of the Government: 1.Activities / items that require an Industrial License; 2.Proposals in which the foreign collaborator has a previous / existing venture / tie up in India in the same or allied field 3.All proposals relating to acquisition of shares in an existing Indian company by a foreign / NRI investor. 4.All proposals falling outside notified sectoral policy / caps or under sectors in which FDI is not permitted. The policy permits FDI up to 100 % from foreign / NRI investor without prior approval in most of the sectors including the services sector under automatic route.  FDI in sectors / activities under automatic route does not require any prior approval either by the Government or the RBI.

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