Difference between FII and FDI?

sir can u explain me the basic difference between FII & FDI? & is there any specific percentage when a fii investment is termed as FDI?

1 Answer(s)


FDI - Foreign Direct Investment is when a company such as British Petroleum invests in building oil refineries in India, or Telenor investing in cell phone infrastructure etc. Basically foreign companies investing in India to expand their operations.

FII - Foreign Institutional Investment - is when foreign banks, or Venture Capital Funds or Private Equity funds or Mutual Funds buy shares in an Indian company.

There is no connection between a FII becoming FDI after a certain %.