Which of the following would include Foreign Direct Investment on India?

1. Subsidiaries of foreign companies in India
2. Majority foreign equity holding in Indian companies
3. Companies exclusively financed by foreign companies
4. Portfolio investment

Select the correct answer using the codes given below:
a) 1, 2 , 3 and 4
b) 2 and 4 only
c) 1 and 3 only
d) 1, 2 and 3 only

Ans: [D] 

Explanation- FDI is an investment made by a company or entity based in one country, into a company or entity based in another country. Foreign direct investments differ substantially from indirect investments such as portfolio investment, wherein overseas institutions invest in equities listed on a nation’s stock exchange.

FDI in India means investment by non-resident entity/person resident outside India in the capital of an Indian company under Schedule 1 of Foreign Exchange Management or in other words a Therefore, 1, 2 and 3 falls under these definitions clearly.