New Delhi, Feb 8 (IANS): Foreign investors are preparing to increase their investments in the Indian stock market, drawn by the prospect of strong long-term returns, according to experts on Saturday.
With significant reforms aimed at strengthening the financial services sector, fostering inclusivity, and encouraging foreign participation, the government has charted a clear path toward achieving its ‘Viksit Bharat’ vision.
“While foreign portfolio investment (FPI) inflows have not yet fully turned positive, the announcements made in the recent Budget, along with the Reserve Bank of India’s (RBI) policy decisions this week, have put India back in the spotlight as one of the world’s fastest-growing economies,” said Manoj Purohit, Partner and Leader of FS Tax at BDO India.
Despite global macroeconomic challenges—such as potential trade restrictions from the newly-elected US government under Donald Trump, rising inflation, currency fluctuations, and the threat of trade wars—India is positioned to weather the storm. The country’s resilience can be credited to strong policy measures and timely rate cuts by the RBI, aimed at boosting domestic investments and consumption while maintaining market stability.
“The government has addressed investor concerns by simplifying the tax regime, resolving tax-related anomalies, and extending tax holidays in the IFSC Gift City by an additional five years to ensure continued foreign interest,” Purohit explained.
The government’s decision to allow 100 percent foreign direct investment (FDI) in the insurance sector is expected to deepen market penetration, create a more competitive regulatory framework, and encourage the adoption of global best practices as large international players enter the sector.
With a clear emphasis on technology, youth skill development, and infrastructure investment, the government is making its intentions clear: to foster long-term growth and build a self-reliant economy.
In January, foreign institutional investors (FIIs) sold ₹72,300 crore worth of stocks, continuing their selling streak after a temporary inflow of ₹11,000 crore in December. FIIs were net sellers on 22 out of 23 trading days in January.
A note by JM Financial Institutional Securities highlighted that FII shareholding in Indian equities stood at 16 percent in January, a level consistent with that of October.
Despite global market volatility, Purohit remains optimistic. “India is well-prepared, with the government implementing timely measures to face the economic challenges that lie ahead,” he concluded. ( Inputs with IANS)