FDI norms as per Union Budget 2016-17

Q.  Which of the following is/are true regarding the FDI norms announced in Union Budget 2016-17?

1) Investment limit for foreign entities in Indian stock exchanges from five per cent to 15 per cent on par with domestic institutions.
2) The existing 24 per cent limit for investment by foreign portfolio investors (FPI) in CPSEs other than banks, listed in stock exchanges, will be increased to 49 per cent.

- Published on 21 Mar 16

a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2

ANSWER: Both 1 and 2
 
  • The FY’17 Budget has also proposed to hike the investment limit for foreign entities in Indian stock exchanges from five per cent to 15 per cent on par with domestic institutions.
  • This move is aimed at enhancing global competitiveness of Indian stock exchanges and accelerating adoption of best-in-class technology and global market practices, the government said.
  • Also, the existing 24 per cent limit for investment by foreign portfolio investors (FPI) in CPSEs other than banks, listed in stock exchanges, will be increased to 49 per cent.
  • The move is to obviate the need for prior approval of government for increasing the FPI investment.

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