NEW DELHI: India was one of the most favoured destinations for investment for overseas fund managers even amidst the Covid-19 crisis as it recorded highest ever foreign portfolio investments (FPIs) in 2020-21.
The financial year 2020-21 was marred by technical recession as the Covid-19 pandemic led to nationwide shutdown of business and economic activities to curb the spread of the virus.
However, India witnessed strong FPI inflows into the equity markets to the tune of Rs 2,74,032 crore during financial year 2020-21.
This reflects confidence of foreign investors in the fundamentals of the Indian economy.
Interestingly, 26 per cent of the total FPI equity inflows over the last 30 years was witnessed in FY21 itself.
Further, the rise in foreign fund inflows is also one of the main reasons for equity indices surging to record highs. The benchmark BSE sensex has jumped over 22 per cent in this year so far, while the broader NSE Nifty
Simplification of FPI regulation norms, faster than expected economic recovery and multiple tranches of stimulus package by the Centre, reposed investors' faith in the potential of India's growth, the government had said in an official release in April.
Meanwhile, for the current financial year, in the first three trading sessions of September, FPIs have pumped in Rs 7,768.32 crore in Indian markets -- both equity and debt.
While the second wave of the pandemic prompted overseas investors to turn negative on Indian equities in April and May, they came back strongly in June to pump in $2.36 billion as the situation turned favorable for them.
(With inputs from agencies)
