The Finance Ministry said on Tuesday that it would finalise views on the definitions of foreign direct investment (FDI) and foreign institutional investment (FII) in the next two weeks to remove any ambiguity over the two terms.
"In the next two weeks, we will finalise our view on FDI/FII definition. It is only a question of logical consistency," Economic Affairs Secretary Arvind Mayaram told reporters in Delhi, after a meeting on the matter.
The meeting was attended by officials from the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi) and the Department of Industrial Policy and Promotion (DIPP). A committee headed by Mr Mayaram is looking into the definitions.
Mr Mayaram had earlier said there is confusion among foreign investors because of the distinction between FDI and FII.
In his budget speech, Finance Minister P Chidambaram had proposed to follow the international practice with regard to defining both the terms.
"Where an investor has a stake of 10 per cent or less in a company, it will be treated as FII and where an investor has a stake of more than 10 per cent, it will be treated as FDI," Mr Chidambaram had said.
India's FDI inflows during April-August grew 4 per cent to $8.46 billion.
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