What is FDI?

• FDI (Foreign Direct Investment) occurs with the purchase of the “physical assets or a significant amount of ownership (stock) of a company in another country in order to gain a measure of management control” 
•  A foreign company having a stake in a Indian Company.

For eg: Maruti Suzuki whereas Maruti is an Indian company and a Suzuki is a foreign one.

What is FII?

• FII (Foreign Institutional Investor) used to denote an investor, mostly in the form of an institution. 
• An institution established outside India, which proposes to invest in Indian market, in other words buying Indian stocks. 
• FII's generally buy in large volumes which has an impact on the stock markets. Institutional Investors includes pension funds, mutual funds, Insurance Companies, Banks, etc.