For the sake of simplicity, home country is assumed to be India.
You are a businessman living in USA and you have idle funds which you want to invest then you have 3 ways to do it.
- If you have large capital base then you can try opening a business by acquiring a business in India or setting up a new unit. (FDI)
- If you have normal capital base and you don’t have time to look after the business but still want to have the controlling interest in India then you can choose to acquire equity of company in India. Say 20-30%. (FPI)
- If you already have a good portfolio but you want to diversify investments, you may consider investing in securities like debentures, bonds, shares or real property etc. in India. (FII)