Retail investors have reposed their faith in the Indian stock markets by displaying their capacity to absorb the shock due to outflow of foreign portfolio investor (FPI) funds recently, while the country remains the highest receiver of the job-creating foreign direct investment (FDI), finance minister Nirmala Sitharaman told Lok Sabha on Monday.
According to data available with the depositories, FPIs pulled out a net Rs 1.48 trillion between October 2021 and March 2022. The market volatility rose in March after the Ukraine-Russia war broke out.
“It is that (FDI) which indicates that the money which is coming in is staying inside this country, thereby creating jobs and prospects for us. FIIs and FPIs may come and go but today the Indian retail investors have proven that any shock that may come in is now taken care of because of the shock-absorbing capacity the Indian retailer has brought into the Indian market,” Sitharaman said.
Replying to a question asked by Congress member Shashi Tharoor in Lok Sabha, the minister said foreign investments have to be gauged, not just by looking at FIIs and FPIs which by very nature depend on the interest rates and they keep on “moving up and down”.
Last week, Sithtaraman told Parliament that FDI into the country during the Modi government’s time was $500.5 billion, 65% more than the amount received in the 10 years of the UPA government, as investors have trusted the economic management of the current regime.
“We in the House should should stand up and appreciate the Indian retailer who has invested a lot of confidence in the markets today in India,” she added.