FDI Full Form is Foreign Direct Investment. This term refers to the investment that is made by a company in one country into a company that is based in another country. There a huge difference between FDI and indirect investments like portfolio flows. Here, the institutions overseas, invest in NSE equities. However, companies or entities those make direct investments, have significant influence over the company in which they invest.
It is common for open economies equipped with high growth prospects and skilled work forces to attract huge FDI that highly regulated and closed economies. The investing entity may set up an associate company or subsidiary in the foreign land. This is done by acquiring shares through a joint venture.