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FPI inflows remain resilient, SEBI move to further boost foreign investments: Analysts

FPI inflows remain resilient, SEBI move to further boost foreign investments: Analysts

Hans India21-06-2025
Mumbai: The trend of foreign portfolio investment (FPI) experienced a reversal in April and demonstrated considerable strengthening in May, characterised by positive inflows, which continues as June progresses, analysts said on Saturday.
On June 20, the FPI inflows in equity stood at Rs 7,940.70 crore, as per the NSE's latest data.
According to market experts, the inflows recorded in May represented the highest level observed in eight months, signifying a resurgence of interest from foreign investors in the Indian markets.
'Nonetheless, geopolitical tensions, including the conflict between Israel and Iran, alongside global uncertainties, fostered a cautiously optimistic pattern in June,' said Vipul Bhowar, Senior Director-Listed Investments, Waterfield Advisors.
Enhancing domestic fundamentals and a favourable long-term growth outlook indicate that, should global conditions stabilise, India may experience more sustained and stable foreign portfolio investment inflows in the future, he added.
India's economy continues to stand out as one of the world's fastest growing and most resilient, backed by strong macroeconomic fundamentals and a vibrant policy landscape. The nation's regulatory institutions, led by SEBI, have consistently pursued reforms aimed at deepening market participation, enhancing transparency, and simplifying compliance to attract global capital.
In a landmark move to deepen the debt market and provide much needed liquidity; SEBI has announced regulatory relaxations exclusively for FPIs investing in Government Securities (G-Secs) in the recent board meeting.
'This forward-looking measure arrives on the heels of India's inclusion in global bond indices like the JP Morgan Global EM Bond Index and Bloomberg EM Local Currency Government Index, which is expected to attract large-scale FPI inflows,' said Manoj Purohit, Partner and Leader, Financial Services Tax, Tax and Regulatory Services, BDO India.
SEBI's move reduces compliance burdens by harmonising KYC review timelines with RBI norms, exempting GS-FPIs from submitting investor group details, and permitting NRIs, OCIs, and Resident Indians to participate in GS-FPIs with fewer restrictions.
Additionally, FPIs now enjoy a more relaxed timeline -- 30 days for disclosing material changes, up from 7 days earlier.
These changes reflect SEBI's risk-based regulatory approach and are poised to deepen FPI engagement in India's sovereign debt market. As India's economic fundamentals remain robust, these progressive measures will strengthen the country's appeal as a stable and attractive investment destination for global institutional investors, said analysts.
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