Foreign Portfolio Investment

Foreign Portfolio Investment (FPI) involves purchasing financial assets like stocks or bonds in a country other than one’s own, aiming for financial returns without taking direct control over businesses or assets. It is a way for investors to diversify their holdings and seek profits from different economies' growth or interest rates. FPI is generally more liquid and less involved than foreign direct investment, allowing investors to quickly buy or sell these assets. For recipient countries, FPI can bring in capital and boost markets but may also cause volatility due to rapid investment shifts.