Foreign Trade Policy and Foreign Investments in India: JAIIB Paper 1 – Module A Complete Guide
This comprehensive guide covers Foreign Trade Policy and Foreign Investments in India for JAIIB Paper 1 Module A. Understanding these concepts is crucial for banking professionals as they play a vital role in India’s economic growth and development.Foreign Trade Policy (FTP)
India’s Foreign Trade Policy is formulated and announced by the Ministry of Commerce and Industry. The policy aims to promote exports, facilitate imports, and enhance India’s global trade competitiveness.
Key Objectives:
- Double India’s exports
- Create employment opportunities
- Enhance technological capabilities
- Promote value addition
- Support Make in India initiative
Foreign Direct Investment (FDI)
FDI refers to investment made by foreign entities in Indian businesses with the intention of establishing lasting interest and significant degree of control.
Types of FDI:
- Automatic Route – No prior government approval required
- Government Route – Requires approval from relevant ministry
Foreign Portfolio Investment (FPI)
FPI involves investment in financial assets such as stocks and bonds without direct control over the business operations.
Key Differences between FDI and FPI:
FDI is less volatile than FPI
FDI involves long-term commitment; FPI is short-term
FDI provides management control; FPI doesn’t
Related Topics:
Economic Reforms in India: Structural Changes and Banking Impact
Globalization Impact on Indian Economy: LPG Reforms & Integration