UPSC Civil Services Model Paper 7

FDI is allowed in India under two modes: the automatic route or through the government route.
Companies don't need government approval in Automatic Route.
companies need Government approval in Government mode.
Provisions of the New FDI policy:
An entity of a country , which shares a land border with India or where the beneficial owner of investment into India is situated in or is a citizen of any such country, can invest only under the Government route.
Hence, Statement 1 is incorrect.
A transfer of ownership in an FDI deal that benefits any country that shares a border with India will also need government approval.
Investors from countries not covered by the new policy only have to inform the RBI after a transaction rather than asking for prior permission from the relevant government department.
India shares land borders with Pakistan, Afghanistan, China, Nepal, Bhutan, Bangladesh, and Myanmar .
This revised FDI policy aims to curb opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic.
Hence, Statement 2 is incorrect.
China's investment in the Indian business space has been expanding rapidly .