2017 Brings over $30 Billion Overseas Funds to India Stock Market

The overall net inflow of foreign  investor funds has made 2017 the best period in three years for India’s capital markets — both equity and debt — with combined net inflows of over $30 billion. Banking, housing finance, and the auto industry sectors have seen consistent foreign portfolio inflows. The higher inflow in 2017 can be attributed to the expectation of a rise in domestic economic growth, experts said.

Economy chart

As the year draws to a close, the Indian stock market seems to have regained its status as one of the most favored destinations for foreign portfolio investors, reports Business Today. However, market analysts believe that foreign portfolio flows may not continue in 2018 with the withdrawal of liquidity and rate hikes in developed economies picking up. Additionally, the inflation cycle is likely to turn following an increase in commodity prices and a recovery in consumption demand.

Dinesh Rohira, founder and chief executive at 5nance.com said that business sentiment among companies has improved because of India’s ‘ease of doing business’.  The government’s commitment in speeding up development and economic reforms before going for elections in 2019 bodes well for foreign investors’ confidence, he added. The government’s decision to recapitalize state-owned banks is also expected to enhance lending and propel economic growth.

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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