FIIs pump $5 bn into India in July alone

Reflecting the continued confidence of investors in the Narendra Modi-led government, foreign entities have poured more than $5 billion into the Indian market so far this month, taking the total foreign institutional investment (FII) inflow to over $25 billion in just the six months since January.

This month alone, net investments by foreign investors in the equity market were $2.2 billion (Rs13,166 crore) from 1-25 July, while in the debt market they amounted to $3 billion (Rs17,829 crore), taking the total to $5.2 billion (Rs30,995 crore), according to the latest data.

Market analysts anticipate that inflows would continue in the coming months on slew of measures announced by the government.

The union cabinet has accepted the proposal to raise the foreign direct investment (FDI) cap in insurance to 49 per cent, paving the way for the inflow of as much as Rs25,000 crore of foreign funds in the sector.

Besides, the FII limit for investment in government securities has been hiked by $5 billion, with a cap of $30 billion.

Also, the government may soon take a decision on easing FDI in railways and the defence sector.

Since the beginning of the year, foreign investors have made a net investment of $25.5 billion (Rs1.53 lakh crore) in the country's securities market. This includes a net investment of Rs72,961 crore in equities and Rs80,663 crore in the debt market.

From the beginning of June, FIIs along with sub-accounts and qualified foreign investors have been clubbed together by the Securities & Exchange Board of India to create a new investor category called Foreign Portfolio Investors.

Strong inflows in the recent months have taken the cumulative net investments of foreign investors into India to over $196 billion since 1991. In rupee terms, their investments are at Rs9.4 lakh crore.