UPSC General Studies Sample Paper General Studies Sample Paper-6

  • question_answer
    Consider the following statements related to Foreign Direct Investment.                
    1. FDI in India can enter via two routes that are 'Automatic route' and 'Approval route'.      
    2. Under automatic route, the foreign investment has to get approval from RBI.               
    3. Under approval route, foreign investor needs to get approval from both RBI and government
    4. FDI under automatic route are not allowed for industries, which require license to operate.  
    Which of the statements given above are correct?                                  

    A)  1, 2 and 3                    

    B)  1 and 4               

    C)             1, 2 and 4                    

    D)  All of these                       

    Correct Answer: B

    Solution :

    [b] Statement 2 is wrong, because under automatic route the foreign investor need not get any approval from government as well as RBI. Only thing required is they need to notify the concerned regional office of RBI within 30 days of receipt inward remittances and file required documents with that office within 30 days of issue of shares to foreign investors. Statement 3 is also incorrect because under approval route they need to get approval only from government and not from RBI. FDI under automatic route are not allowed for defence pension sector, teleports, print media, satellites, private sectors etc which require license to operate.     

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