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salman

student

23 Points Posted on 22 December 2015

what is difference between fdi and fii

Replies (3)

CA Prateek Garg

CA in Practice

1113 Points Posted on 22 December 2015

FDI is foreign investment in a specific entity. It generally creates new entities and used to increase the capacity of existing entities.

On the other hands FII investment is foreign investment in share market. it is not specific to any particular entity and FII is free to liquidate his investment in any share, any time, and to invest the money in other share or to take back his investment out of country.

From above you can see that FDI is more useful as it creates new business. it is a long term investment in comparison of FII Ivestment.FII, on the other hand, is more of speculative nature. Only aim of FII is to make profits out of share market.

In simple terms it can be said that FII is investment in Indian share market by the foreign institutions and FDI is doing business in India by any foreign company or entity.

Jeet Vachharajani

Student

344 Points Posted on 23 December 2015

In simple terms, FII-A foreign company is registered outside the country in which it is investing. (Eg.-'X' company,an Australian firm,registers itself in Australia,and invests in India) FDI-The same 'X' company investing in an Indian company.It is basically the controlling of a firm of the home country done by the firm of an outside country.