New Delhi, June 13 -- Foreign Portfolio Investments (FPIs) and Foreign Direct Investments (FDIs) are two key channels through which foreign capital enters India. While both support economic growth, they differ significantly in terms of ownership, investment horizon, capital mobility. Here's how FPIs and FDIs differ from each other and how they impact the markets.

Explaining the difference in nature of their investments, Abhishek Kumar, SEBI RIA, Founder- SahajMoney, says. "FDI is a committed capital as its used to build factories, buy stake in or acquire businesses and stays invested for years or decades. Due to this design the flight of this capital is difficult."

"On the other hand FPI is financial capital and is hot money as it used ...