What is the role of FII in India economic reforms?
Show answer & explanation
Correct answer: C
Explanation
Correct Answer
Invest in India’s financial markets
Explanation
FII (Foreign Institutional Investors) primarily refers to foreign institutional investors who invest in India’s financial markets, including the stock market and bond market. After economic reforms, FIIs have played a significant role in increasing capital inflow, improving market liquidity, and encouraging investment in the Indian economy.
Key Points
• FIIs refer to foreign investors investing in Indian financial markets.
• They contribute to capital inflows in stock and bond markets.
• They improve market liquidity and stability.
• Economic reforms have facilitated greater foreign investment in India.
Additional Facts
• FIIs are now commonly referred to as FPIs (Foreign Portfolio Investors).
• They are an important channel of foreign capital inflow.
• They also support India’s foreign exchange reserves and economic growth.
Important Questions
Question: What does FII stand for?
Answer: Foreign Institutional Investors
Question: Where do FIIs invest?
Answer: In financial markets (stocks and bonds).