Panel report on FDI, FII definitions by month-end

A high-level panel headed by Economic Affairs Secretary Arvind Mayaram would finalise by the month-end its report on the definition of foreign direct investment (FDI) and foreign institutional investor (FII), aimed at removing ambiguity on the two types of foreign investment.

“The committee is likely to meet after October 15 to give a final shape to the definition of FDI and FII,” a government official said. The four-member committee was set up to  remove the ambiguity between FDI and FII.

The other members of the committee are the Secretary in the Department of Industrial Policy and Promotion (DIPP), the Deputy Reserve Bank of India governor and a wholetime member of the Securities and Exchange Board of India.

Finance Minister P Chidambaram had in his Budget speech proposed to follow international practices with regard to definitions of FDI and FII. Chidambaram proposed laying down a broad principle that would consider a stake of 10 per cent or less in a company as FII and an investment exceeding 10 per cent as FDI.