Foreign investors set to return in Indian market to get sound, effective net returns

New Delhi (The Uttam Hindu): The foreign investors’ fraternity is all set to take a plunge investing in the Indian stock market to get sound, effective net returns from a long-term perspective, according to experts on Saturday.

With the sound and pathbreaking reforms for making the financial services sector more robust, inclusive and enhance foreign participation, the government has clearly laid the roadmap for ‘Viksit Bharat’ vision on track.

“Though the foreign portfolio investment (FPI) inflows are still not turned fully green, the announcements made in the Budget last week followed by the Centrals Bank’s policy release this week has made India back to forefront as the fastest emerging economies of the world,” said Manoj Purohit, Partner and Leader, FS Tax, Tax and Regulatory Services, BDO India.

Despite the macro factors such as fear of potential tariff and trade curbs to be announced by the newly-elected US government under Donald Trump, rising inflation risk, currency depreciation, trade wars looming around, India is well poised and self-insulated by strong measures and timely rate cut measures taken by the RBI to boost domestic investments and consumption keeping the market buoyancy live.

“The government has echoed the sentiments by simplifying tax regime, clarifying anomalies on taxation, extending several tax holidays in IFSC Gift City by another 5 years to keep the door open for them,” said Purohit.

Inviting 100 per cent FDI in insurance will deepen the budding insurance market with more penetration, competitive policy framework pushing to adopt the global best practices in the insurance sector with the entry of large offshore players.

Keeping technology, youth’s skill developments and infrastructure as primary areas to allot capex; the intention is very vivid to take India on being an autonomous nation with long term growth trajectory.

In January, FIIs offloaded Rs 72,300 crore worth of stock, continuing their selling streak after a break in December (inflows of Rs 11,000 crore). FIIs were sellers for 22 out of 23 trading days in January.

“FII shareholding in the Indian equities was 16.0 per cent as of January, which was similar to what was witnessed in October,” according to a note by JM Financial Institutional Securities.

According to Purohit, given the volatile, subtle, and unpredictable market events, India still stands grounded well with the government taking all rightful measures to make it ready to face the global economic challenges that lies ahead.