Correct answer: (b) It is a largely non-debt creating capital flow.
Explanation
- A
It is the investment through capital instruments essentially in a listed company.
Capital instruments in a listed company. That is closer to FPI/portfolio, not the FDI hallmark.
- B
It is a largely non-debt creating capital flow.
A largely non-debt creating capital flow. Equity control; no scheduled repayment like an ECB.
- C
It is the investment which involves debt-servicing.
Involves debt-servicing. That is ECB/NRI deposits, not FDI.
- D
It is the investment made by foreign institutional investors in the Government securities.
Investment in government securities. That is FPI in gilts.
Summary. Official key is (b). FDI’s major characteristic here is that it is largely non-debt creating — unlike ECBs or NRI deposits. It is not essentially listed-stock buying or G-sec investment.
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