Key driver of D-Street rally remains in full force | Economic Times

Foreign portfolio investors (FPIs) are optimistic on India, where in October they invested more than any other emerging markets, excluding China, said Sriram Krishnan, head — securities services for Deutsche Bank India and sub-continent. In an interview with Pavan Burugula, Krishnan said more FPIs are registering to invest in India. Edited excerpts:What is the sentiment among FPIs on India?FPIs certainly continue to be positive on India, with several high frequency indicators pointing towards the recovery in the economy. Compared to the huge outflow we saw in March 2020 (₹118,203 crore), when the lockdown began, we have seen reasonably good inflows in June 2020 (₹26,009 crore), August (₹49,879 crore) and October (₹21,826 crore). On an overall basis, till October, FPIs have been net sellers in the debt segment, but we have seen positive net inflows in the last two months. India has strong structural drivers in place to sustain growth. Foreign investors have put more money in Indian stocks in October than any other emerging market, excluding China. This indicates the confidence of foreign investors in the India market.What is the situation currently in terms of fresh FPI registrations?In terms of fresh FPI registration, we see the volume slowly picking up pace. Although we are yet not near the pre-Covid levels, it is picking up pace and hope to see higher numbers in the new year. India currently has about 9,800 FPIs registered as compared to 9,500 levels at the beginning of the year.What is your assessment of the regulatory environment for FPIs after the recent changes?The new FPI regulations and amendments to FEMA (Foreign Exchange Management Act) released a year back and the new CAF (Common Application Form) released in April have eased the process for FPIs access to India market. Similarly, the Fully Accessible Route rolled out by RBI has been a very positive move with Indicative Value of Aggregate Holding of FPIs being more than ₹34,000 crore as of November 5. FPIs are looking forward to settlement of Indian Government Bonds through the ICSDs. Another eagerly awaited outcome is the inclusion of Indian Government bonds in the Global Bond Indices.What are the other changes that FPIs are seeking?One of the key suggestions from the FPIs has been consistency in the regulatory framework and to avoid any frequent changes. With the experience of the pandemic behind us, FPIs also want to see a Digital Market Entry mechanism being rolled out together with full acceptance of electronic signatures. This can significantly improve the ease of doing business and improve the experience for foreign investors.