BANKING AFFAIRS

Detailed explanation-1: -Foreign Direct Investment (FDI) in Limited Liability Partnership (LLP) The concept of LLP, introduced in India through the Limited Liability Partnership Act, of 2008, has become a popular form of business entity in India owing to its simplified procedures for registration and maintenance.

Detailed explanation-2: -2 Modes of FDI in LLP (Limited Liability Partnership) A direct investment is when a foreign entity makes a direct investment in an Indian firm. An indirect investment is one that is made by a foreign entity into a domestic entity.

Detailed explanation-3: -Eligibility of an LLP. FDI in LLPs is permitted, subject to the following conditions: i. FDI is permitted under the automatic route in LLPs operating in sectors/activities where 100% FDI is allowed through the automatic route and there are no FDI-linked performance conditions.

Detailed explanation-4: -Downstream Investment in LLP Downstream investment means indirect foreign investment, by an eligible Indian entity (which is owned and controlled by persons resident outside India), into another Indian company/LLP, by way of subscription or acquisition.

Detailed explanation-5: -Answer: Downstream investment is investment made by an Indian entity which has total foreign investment in it or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Indian entity.