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Foreign direct investment is something some countries do to try to help other countries. These investments help the economies of the countries and help the people get out of poverty.

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How FEMA regulates the flow of foreign investment in India?

The Foreign Exchange Management Act (FEMA) regulates foreign investment in India by establishing guidelines for foreign direct investment (FDI) and portfolio investment. It categorizes sectors into automatic and government approval routes, determining the extent and conditions under which foreign entities can invest. FEMA also mandates compliance with reporting requirements and foreign exchange transactions to ensure transparency and adherence to national interests. Overall, it aims to facilitate foreign investment while safeguarding India's economic sovereignty.


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