Answer to Question #51804 in Economics for rini

Question

Explain the different types of FDIs and their presence in India.

Answer 1

A foreign direct investment (FDI) is a controlling ownership in a business enterprise in one country by an entity based in another country.
Types of FDI:
Horizontal FDI arises when a firm duplicates its home country-based activities at the same value chain stage in a host country through FDI.
Platform FDI Foreign direct investment from a source country into a destination country for the purpose of exporting to a third country.
Vertical FDI takes place when a firm through FDI moves upstream or downstream in different value chains i.e., when firms perform value-adding activities stage by stage in a vertical fashion in a host country.
All these types of FDI are represented in India.