Foreign portfolio investment

Foreign Portfolio Investment (FPI) is the capital inflow from one country to another that takes the form of portfolio investment, which is more liquid and involves less control than direct investment. Foreign portfolio investment is a type of passive investing where investors purchase securities of foreign companies, but do not actively participate in the management of those companies. The term "passive" means that the investors are not involved in the day-to-day operations of the companies they invest in; they simply buy securities and hope that their value increases over time.
Portfolio investment is a type of investment involving a collection of assets — usually financial securities — owned by an individual or company. Portfolio investments are typically made with the expectation that they'll generate income and/or capital gains.
Benefits of Foreign Portfolio Investment.
The primary benefit of foreign portfolio investment is:
Risks of Foreign Portfolio Investment.
In addition to its potential benefits, there are some significant risks associated with foreign portfolio investment. These can include currency risk, interest rate risk, political risk and regulatory risk. Many emerging markets have volatile currencies which may strengthen or weaken substantially over time depending on political circumstances, inflation and other factors. Low Liquidity is the risk of FPI, The capital market liquidity in emerging countries is generally poor, resulting in more price volatility.
Who Regulates FPI in India?
The Securities and Exchange Board of India (SEBI) regulates foreign portfolio investment in India. To invest in a company in India, foreign investors must obtain an approval from SEBI.