The cumulative net investments by foreign investors have now gone past Rs 11 lakh-crore mark, with about Rs 2.74 lakh crore being infused into Indian capital markets by such investors during 2014-15 alone.
Foreign investors made a net investment of Rs 1.1 lakh crore in equities in 2014-15 and Rs 1.64 lakh crore into debt markets — a total of Rs 2.74 lakh crore — as per the latest data with Central Depository Services.
This has taken their cumulative net investments into the Indian equity markets, since being allowed over two decades ago in November 1992, to Rs 8.2 lakh crore.
The cumulative figure for debt securities since 1992 has also grown to Rs 3.04 lakh crore – taking the total for overall Indian markets to Rs 11.22 lakh crore.
These investors, which were re-christened as Foreign Portfolio Investors or FPIs in 2014 have emerged as a key driver of the ongoing record rally in the Indian markets.
Market analysts attributed the huge inflow to reform measures taken by the government, expectation of a strong revival in economic growth and falling interest rates.
Experts also believe that inflows will remain equally strong or become even better in the current fiscal year in view of Parliament clearing key bills as well as assurances in the Budget for controversial tax areas like General Anti-Avoidance Rule.
In 2013-14, FPIs had made a net infusion of nearly Rs 80,000 crore into equity markets, while they had pulled out about Rs 28,000 crore from the debt markets.