FII versus FDI

I was delighted to read your cover story in the latest magazine issue titled ‘FIIs to Remain Bullish on India’. I agree with your stance that FIIs should prefer Indian markets in the coming years than the other emerging or developed markets. Can you explain what is FDI? Also, what is the difference between FDI and FII? - Geeta

Editor Responds: We are glad to receive such positive feedback from you. To answer your question, FDI (foreign direct investment) is the term used to describe investments made in foreign nations including capital transfers from one nation to another. Through FDI, the investing company may establish its business operations in a foreign land or even make international acquisitions. Meanwhile, large corporations and institutions known as FIIs (foreign institutional investors) are usually investment funds registered in a country other than the one it is investing in. FDI, as opposed to FII, provides job possibilities and infrastructural development in the investee country, which promotes economic growth. Productivity in the nation rises as a result of FDI in contrast to FII, which raises the capital of the nation. Hope we have answered your query. Keep writing to us!