FPIs Investment Exceeds USD 1 Trillion in Indian Securities | 09 Oct 2024

Source: BS

Foreign Portfolio Investors (FPIs) have accumulated about USD 1.1 trillion in Indian securities, highlighting India's increasing attractiveness to global investors.

• This represents a threefold increase from the Covid-19 low of USD 329 billion in March 2020. India's market capitalisation has also quadrupled, now around USD 5.6 trillion.
• Indian markets have provided strong long-term returns, with a 10-year annualised return of 8.5% for the Sensex in US dollar terms, compared to 9.7% for the Dow Jones index of the United States (US).
• Liberalised investment rules and a supportive regulatory framework have driven this growth since India opened to FPIs in 1992 (then known as foreign institutional investors (FIIs)), following the 1991 balance of payments crisis.
  • FPIs consist of non-residents investing in Indian financial assets like shares, government bonds, corporate bonds, convertible securities, and infrastructure securities.
  • FPIs include investment groups such as FIIs, Qualified Foreign Investors (QFIs), and subaccounts.
• The primary sources of FPI inflows into India are the US, Singapore, and Luxembourg.

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