FII vs FDI

Seeking to end ambiguity, the government today proposed to follow the international practice with regard to defining foreign direct investment (FDI) and foreign institutional investors (FII). "In order to remove the ambiguity that prevails on what is FDI and what is FII, I propose to follow the international practice and lay down a broad principle," Finance Minister P Chidambaram today said in his Budgetary proposals. He said that "where an investor has a stake of 10 per cent or less in a company, it will be treated as FII and, where an investor has a stake of more than 10 per cent, it will be treated as FDI".