Foreign Investment — Mains Questions

Critically analyze the evolution of India's Foreign Direct Investment (FDI) policy since 1991. Discuss its impact on key sectors and highlight the challenges that persist despite liberalization.

Distinguish between Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). Evaluate their respective roles in India's Balance of Payments and discuss the policy measures to manage their implications.

The recent policy changes in India's foreign investment regime reflect a strategic shift towards attracting 'quality FDI' aligned with national development goals. Elaborate on this statement with suitable examples and discuss the challenges in achieving this objective.