Finance Ministry forms panel to rationalise FII, FDI definition

NEW DELHI: The Finance Ministry has notified an eight-member panel under Economic Affairs Secretary Arvind Mayaram for giving clear definitions to FDI and FII, a move aimed at removing ambiguity in the types of foreign investments.

"In accordance with the budget announcement, a committee is hereby constituted, to examine and work out the details of the application of the principle followed internationally for defining FDI and FII," the Ministry said today.

The other members include DIPP Secretary, Chief Economic Advisor in DEA, RBI Deputy Governor H R Khan and SEBI Member S Raman.

Finance Minister P Chidambaram in his budget speech had proposed to set up the panel to remove the ambiguity that prevails on what is Foreign Direct Investment (FDI) and what is Foreign Institutional Investment (FII).

Currently, if an investor has a stake of 10 per cent or less in a company, it is treated as FII. If the stake exceeds 10 per cent, the investment is treated as FDI.