What is the Full Form of FPI?

The Full Form of FPI is Foreign Portfolio Investment. It is an investment made by foreign individuals or institutions in financial assets such as stocks, bonds, and other securities of a country. Furthermore, unlike Foreign Direct Investment (FDI), in which they obtain a significant degree of control or ownership in a company, FPI revolves around passive investments without any active management or control. 

Also Read: What is the Full Form of IPO?

What is the Usage of FPI?

In addition, FPI is used for the following reasons:

• FPI has an important part in channelling capital from foreign investors into the domestic financial markets of a country. 
• Additionally, FPI gives a route for investors to diversify their portfolios internationally. Hence they are aiming for higher returns or evading risks in their home markets. 
• Moreover, FPI contributes to the liquidity and efficiency of financial markets. They do so by increasing trading activity.

Also Read: What is the Full Form of DII?

What is the Role of FPI in India?

In India, FPI increases domestic investment and finances economic growth. 

• Moreover, the Indian government promotes FPI inflows through different policy measures and reforms that are aimed at attracting foreign investors. 
• Additionally, FPI also helps in stabilising the Indian rupee exchange rate by providing a steady flow of foreign currency into the country.

Also Read: What is the Full Form of CFA?

What are the Examples of FPI in India?

Additionally, the Examples of FPI in India are as follows:

• Foreign institutional investors (FIIs)
• Foreign portfolio investors (FPIs) 
• Hedge funds
• Pension funds
• Sovereign wealth funds
• Global investment funds

Also Read: What is the Full Form of ETF?

What are the Advantages of FPI?

Furthermore, the Advantages of FPI are: 

• Increased capital inflows
• Enhanced liquidity in financial markets
• Access to global investment expertise
• Technology transfer
• Economic development
• Market efficiency
• Boosts risk-sharing 
• Encourages integration with global financial markets

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