GATT:

General Agreement on Tariffs and Trade. GATT became law on Jan. 1, 1948,
once it was signed by 23 countries. The primary purpose of GATT was to
increase international trade through by eliminating or reducing various
tariffs, quotas and subsidies while maintaining meaningful regulations.
GATT was refined over decades and eventually led to the 123 countries
creating the World Trade Organization (WTO) on Jan. 1, 1995.
Objectives:
1.Expansion of international trade,

2. Increase of world production by ensuring full employment in the

participating nations,

3. Development and full utilisation of world resources, and

4. Raising standard of living of the world community as a whole.

Differences between GATT and WTO:

TRIMS: 1994
The Agreement on Trade-Related Investment Measures (TRIMS) recognizes
that certain investment measures can restrict and distort trade. It states that
WTO members may not apply any measure that discriminates against
foreign products or that leads to quantitative restrictions, both of which
violate basic WTO principles. The Agreement on Trade-Related Investment
Measures (TRIMs) are rules that apply to the domestic regulations a country
applies to foreign investors, often as part of an industrial policy.
TRIPS:
Trade Related Intellectual Property Rights. Intellectual Property Rights are
the rights given to people over the creations of their mind. TRIPs provide
minimum standards in the form of common set of rules for the protection of
intellectual property globally under WTO system. The TRIPs agreement
gives set of provisions deals with domestic procedures and remedies for the
enforcement of intellectual property rights.
Recognises categories of Intellectual Property Rights – seven in all
Patents
Trademarks
Copyrights
Trade Secrets
Industrial Designs
Lay-out designs/Integrated Circuits
Geographical Indications
Defines minimum standards for these rights including scope of the right,
term.
FOREIGN DIRECT INVESTMENT:
Foreign direct investment (FDI) is an investment in a business by an investor
from another country for which the foreign investor has control over the
company purchased. According to the Financial Times, in 2015 India
overtook China and the US as the top destination for the Foreign Direct
Investment. Both FDI and FII is related to investment in a foreign country.
FDI or Foreign Direct Investment is an investment that a parent company
makes in a foreign country. On the contrary, FII or Foreign Institutional
Investor is an investment made by an investor in the markets of a foreign
nation.
FOREIGN PORTFOLIO INVESTMENT:
Foreign portfolio investment (FPI) consists of securities and other financial
assets passively held by foreign investors. It does not provide the investor
with direct ownership of financial assets and is relatively liquid depending
on the volatility of the market. Foreign portfolio investment differs from
foreign direct investment (FDI), in which a domestic company runs a foreign
firm, because although FDI allows a company to maintain better control over
the firm held abroad, it may face more difficulty selling the firm at a premium
price in the future.
Differences Between FPI and FDI
FPI lets an investor purchase stocks, bonds or other financial assets in a
foreign country. Because the investor does not actively manage the
investments or the companies that issue the investments, he does not have
control over the securities or the business. However, since the investor’s goal
is to create a quick return on his money, FPI is more liquid and less risky
than FDI.
In contrast, FDI lets an investor purchase a direct business interest in a
foreign country. For example, an investor living in New York purchases a
warehouse in Berlin so a German company can expand its operations. The
investor’s goal is to create a long-term income stream while helping the
company increase its profits.
The investor controls his monetary investments and actively manages the
company into which he puts money. He helps build the business and waits
to see his return on investment (ROI). However, because the investor’s
money is tied up in a company, he faces less liquidity and more risk when
trying to sell his interest.
The investor also faces currency exchange risk, which may decrease the
value of his investment when converted from the country’s currency to U.S.
dollars, and political risk, which may make the foreign economy and his
investment amount volatile.
FOREIGN INSTITUTIONAL INVESTMENT:
A foreign institutional investor (FII) is an investor or investment fund
registered in a country outside of the one in which it is investing.
Institutional investors most notably include hedge funds, insurance
companies, pension funds and mutual funds. The term is used most
commonly in India and refers to outside companies investing in the financial
markets of India. Countries with the highest volume of foreign institutional
investments are those that have developing economies. These types of
economies provide investors with higher growth potential than in mature
economies. Therefore, these investors are most commonly found in India, all
of which must register with the Securities and Exchange Board of India to
participate in the market.