Concept:The Automatic Route in FDI allows foreign investors to invest in India without needing prior approval from the government or the Reserve Bank of India (RBI).
Explanation:This route is available for sectors where 100% FDI is allowed without any special conditions.
Investors must still follow sector-specific rules and comply with the Foreign Exchange Management Act (FEMA), 1999.
The process is simpler and faster, making India more attractive for foreign investment.
The Department for Promotion of Industry and Internal Trade (DPIIT) regulates and monitors this route.
In contrast, the Government Route requires prior approval from the relevant ministry or department for certain sensitive sectors.
FDI that needs RBI approval usually falls outside the Automatic Route, such as investments exceeding sectoral caps.
FDI is completely banned in areas like lottery, gambling, chit funds, and tobacco manufacturing.
Thus, the Automatic Route specifically means no prior government or RBI approval is needed.
Answer:C. FDI that does not require prior government/RBI approval