Despite the outbreak of COVID-19, India saw strong Foreign Portfolio Investment (FPI) inflows into equity markets worth Rs 2,74,034 crore in 2020-21, according to the Finance Ministry, indicating foreign investors' steadfast confidence.
The strong FPI flows came as a result of the economy's faster-than-expected recovery, which was aided by multiple tranches of creatively designed stimulus packages. In the recent past, the government and regulators took major policy initiatives aimed at improving FPIs' ease of access and investment climate.
These include simplification and rationalisation of the FPI regulatory regime, operationalisation of the online Common Application Form (CAF) for the purpose of registration with SEBI, allotment of PAN and opening of bank and Demat accounts etc, it said.
Increased weightage of Indian securities in major equity indices as a result of the increase in aggregate FPI investment limit in Indian companies from 24 percent to the sectoral cap has mobilised massive equity inflows, both passive and active, into Indian capital markets.
The World Bank, IMF, and several global research organisations have forecast India's growth to be above 10% in FY 2021-22, indicating that India will remain an attractive investment destination in the near future.