Mumbai–Foreign portfolio investment (FPI) inflows into Indian markets have shown remarkable resilience, with analysts noting a positive shift in sentiment that began in April and strengthened significantly in May—marking the highest monthly inflows in eight months.
According to the latest data from the National Stock Exchange (NSE), FPI inflows into equities on June 20 alone stood at ₹7,940.70 crore, indicating sustained foreign investor confidence even as global uncertainties persist.
“Geopolitical tensions, including the Israel-Iran conflict and broader global volatility, have created an atmosphere of cautious optimism in June,” said Vipul Bhowar, Senior Director–Listed Investments at Waterfield Advisors.
Still, he added, India’s improving domestic fundamentals and long-term economic outlook position it favorably to attract steady FPI inflows, especially if global conditions stabilize.
India continues to stand out as one of the world’s fastest-growing economies, driven by strong macroeconomic fundamentals, robust policy support, and proactive reforms. Regulatory institutions, particularly the Securities and Exchange Board of India (SEBI), have played a central role in deepening capital markets and fostering a more transparent and investor-friendly environment.
In a key policy move, SEBI has introduced a set of regulatory relaxations aimed at boosting FPI participation in the sovereign debt market—a timely decision that aligns with India’s upcoming inclusion in global bond indices such as the JP Morgan Global Emerging Market Bond Index and Bloomberg EM Local Currency Government Index.
“This forward-looking measure is expected to unlock large-scale FPI inflows,” said Manoj Purohit, Partner and Leader, Financial Services Tax, at BDO India.
Among the reforms, SEBI has eased compliance requirements for FPIs investing exclusively in government securities (GS-FPIs). These include:
Alignment of Know Your Customer (KYC) review timelines with RBI norms
Exemption from providing investor group-level disclosures
Broader participation eligibility, including NRIs, OCIs, and Resident Indians under simplified rules
Extension of the deadline to disclose material changes from 7 to 30 days
These regulatory changes signal a shift toward a more risk-based, facilitative approach that supports deeper institutional participation in India’s debt markets.
Analysts believe these reforms, paired with India’s solid economic foundation, will further enhance the country’s global investment appeal and open new channels for long-term capital inflows.
“With these steps, India is not just inviting capital, it is building confidence,” said one market observer. “The convergence of policy intent, market opportunity, and investor appetite makes this a defining moment for FPI in India.” (Source: IANS)
