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Below the FPI Progress in November Trend inputs by Manoj Purohit, Partner & Leader, Financial Services Tax, Tax & Regulatory Services, BDO India

Despite the ongoing outrage of funds since last month, this month saw an unprecedented applications of about 40-50 new FPI registrations which are eyeing to enter the Indian market.  All thanks to SEBI’s recent relaxation to NRIs, permitting them to participate upto 100% and announcing measures for ease of entry and operations in India.
Though FPI community had been very cautious about Indian markets in the last couple of months, shifting their allocation to other countries like China; India still stands on better footing as compared to other markets.  The major factors attributable are political certainty, long term growth, better yields, substantial capex spending by the government and last but not the least, the central bank’s vigilant approach while announcing rate cuts to put a check on inflation.
 
The offshore participants are optimistic that the RBI will adopt a balanced approach to ensure the cost of raising funds is under control and is made easily accessible to India Inc in the upcoming quarter’s announcement.
Additionally, the outcome of the recent election results held in the US has created an optimism for the Indian market considering the strategic partnership between the two countries. This will boost the economic and mutual businesses and other foreign trade policies which will make India more lucrative for foreign investments.  We may see the upside in FPI’s inflows in equity and debt segment turning in green in the coming few trading cycles.

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