The government set up a committee to examine and work out the details of the application of the principle followed internationally for defining foreign direct investment (FDI) and foreign institutional investment (FII).
The finance ministry is learnt to have set up an eight-member committee under Economic Affairs Secretary Arvind Mayaram for giving clear definitions to FDI and FII.
It may be recalled that Finance Minister P Chidambaram announced in the union budget 2013-14 that he would set up a committee to remove ambiguity in the types of foreign investments.
The members of the committee includes, among others, DIPP Secretary, Chief Economic Advisor in DEA, RBI Deputy Governor H R Khan and SEBI Member S Raman.
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.