FDI in India

Description: This quiz is designed to test your knowledge on Foreign Direct Investment (FDI) in India.
Number of Questions: 15
Created by:
Tags: fdi indian economics foreign investment
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What is the full form of FDI?

  1. Foreign Direct Investment

  2. Foreign Domestic Investment

  3. Foreign Direct Income

  4. Foreign Direct Interest


Correct Option: A
Explanation:

FDI stands for Foreign Direct Investment, which is an investment made by a company or individual from one country into a company or asset in another country.

Which sector in India has attracted the highest FDI in the last decade?

  1. Manufacturing

  2. Services

  3. Agriculture

  4. Infrastructure


Correct Option: B
Explanation:

The services sector in India has attracted the highest FDI in the last decade, accounting for over 50% of the total FDI inflows.

What is the primary objective of the Government of India's FDI policy?

  1. To promote economic growth

  2. To create employment opportunities

  3. To improve the balance of payments

  4. To enhance technological capabilities


Correct Option: A
Explanation:

The primary objective of the Government of India's FDI policy is to promote economic growth by attracting foreign capital and technology.

What is the maximum FDI limit for the retail sector in India?

  1. 51%

  2. 100%

  3. 74%

  4. 49%


Correct Option: A
Explanation:

The maximum FDI limit for the retail sector in India is 51%, which means that foreign companies can own up to 51% of an Indian retail company.

Which country is the largest source of FDI in India?

  1. United States

  2. United Kingdom

  3. Singapore

  4. Japan


Correct Option: C
Explanation:

Singapore is the largest source of FDI in India, accounting for over 25% of the total FDI inflows in the last decade.

What is the impact of FDI on the Indian economy?

  1. It increases economic growth

  2. It creates employment opportunities

  3. It improves the balance of payments

  4. All of the above


Correct Option: D
Explanation:

FDI has a positive impact on the Indian economy by increasing economic growth, creating employment opportunities, and improving the balance of payments.

What are the challenges faced by FDI in India?

  1. Lack of infrastructure

  2. Complex regulatory environment

  3. High cost of doing business

  4. All of the above


Correct Option: D
Explanation:

FDI in India faces challenges such as lack of infrastructure, complex regulatory environment, and high cost of doing business.

What is the role of the Foreign Investment Promotion Board (FIPB) in FDI in India?

  1. To approve FDI proposals

  2. To regulate FDI inflows

  3. To promote FDI in India

  4. All of the above


Correct Option: D
Explanation:

The Foreign Investment Promotion Board (FIPB) is responsible for approving FDI proposals, regulating FDI inflows, and promoting FDI in India.

What is the significance of FDI in India's economic development?

  1. It provides access to foreign capital and technology

  2. It creates employment opportunities

  3. It improves the balance of payments

  4. All of the above


Correct Option: D
Explanation:

FDI plays a significant role in India's economic development by providing access to foreign capital and technology, creating employment opportunities, and improving the balance of payments.

What are the major sectors that attract FDI in India?

  1. Manufacturing

  2. Services

  3. Infrastructure

  4. All of the above


Correct Option: D
Explanation:

Major sectors that attract FDI in India include manufacturing, services, and infrastructure.

How does FDI contribute to the growth of the Indian economy?

  1. It increases investment and capital formation

  2. It generates employment opportunities

  3. It promotes technological advancement

  4. All of the above


Correct Option: D
Explanation:

FDI contributes to the growth of the Indian economy by increasing investment and capital formation, generating employment opportunities, and promoting technological advancement.

What are the challenges faced by foreign investors in India?

  1. Complex regulatory framework

  2. Lack of transparency

  3. Infrastructure bottlenecks

  4. All of the above


Correct Option: D
Explanation:

Foreign investors in India face challenges such as a complex regulatory framework, lack of transparency, and infrastructure bottlenecks.

What are the benefits of FDI to the Indian economy?

  1. Increased employment opportunities

  2. Improved infrastructure

  3. Access to foreign technology

  4. All of the above


Correct Option: D
Explanation:

FDI benefits the Indian economy by increasing employment opportunities, improving infrastructure, and providing access to foreign technology.

What are the risks associated with FDI in India?

  1. Loss of control over domestic industries

  2. Environmental degradation

  3. Exploitation of labor

  4. All of the above


Correct Option: D
Explanation:

FDI in India carries risks such as loss of control over domestic industries, environmental degradation, and exploitation of labor.

How does the Government of India regulate FDI in the country?

  1. Through the Foreign Exchange Management Act (FEMA)

  2. Through the Foreign Direct Investment (FDI) Policy

  3. Through the Foreign Investment Promotion Board (FIPB)

  4. All of the above


Correct Option: D
Explanation:

The Government of India regulates FDI in the country through the Foreign Exchange Management Act (FEMA), the Foreign Direct Investment (FDI) Policy, and the Foreign Investment Promotion Board (FIPB).

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