What are the Difference between FDI and FII?

FDI

Foreign direct investment (FDI) is an investment in a business by an investor from another country for which the foreign investor has control over the company purchased.

FII

Foreign institutional investors (FIIs) are those institutional investors which invest in the assets belonging to a different country other than that where these organizations are based.

Difference between FDI and FII

• FDI is an investment that a parent company makes in a foreign country. On the contrary, FII is an investment made by an investor in the markets of a foreign nation.
• The FDI flows into the primary market, while the FII flows into secondary market.
• While FIIs are short-term investments, the FDI’s are long term investment.
• FII can enter the stock market easily and also withdraw from it easily. But FDI cannot enter and exit that easily.
• The Foreign Direct Investment is considered to be more stable than Foreign Institutional Investor.

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