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At present, any foreign investor investing in an Indian company and holding 10% or more stake in that company is considered to have made a foreign direct investment (FDI). On the other hand, any holding by a single investor that is less than 10% is considered to be a foreign portfolio investment (FPI). Earlier, there were issues relating to the difference between the two. But in the Budget in February 2013, the government removed the ambiguity. Usually in India, investments through the FPI route -which mainly comes from foreign institutional investors (FIIs), and also other investors like foreign individuals, etc -could be brought in and taken out even over a few days. FDIs, however, are taken to be long-term investments.

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