Official Answer Key & Detailed Solution
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Correct Answer: Option (B) — It is a largely non-debt creating capital flow.
Concept & Option Breakdown
Standard Reference VerifiedForeign Direct Investment (FDI) represents non-debt creating foreign capital inflows as it represents equity participation, joint ventures, or direct ownership of productive assets. Unlike loans or debt borrowings, FDI does not impose contractual debt-servicing obligations (mandatory periodic interest or principal repayment).
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