Global funds buy net 44.0 bln rupees of India equities prior trading day: NSD

Global funds buy net 44.0 bln rupees of India equities prior trading day: NSD

Global Funds Boost Indian Equity Purchases Amid Diversification Trends

According to NSDL data, global funds purchased net 3.40 billion rupees of Indian equities on the previous trading day, reflecting renewed international confidence in the Indian market. This follows a broader trend of increased foreign investment in Indian stocks, driven by the country's economic resilience and structural reforms.

The surge in demand aligns with evolving investment strategies by global funds, which have faced regulatory constraints on overseas investments through traditional channels. For instance, mutual funds in India reached the Reserve Bank of India's (RBI) $7 billion overseas investment cap, prompting investors to explore alternative routes such as the Liberalised Remittance Scheme (LRS). Under the LRS, resident Indians can invest up to $250,000 annually in global securities, with investments growing by in 2024–25, totaling $1.70 billion.

However, the LRS route carries challenges, including a 20% tax on remittances exceeding Rs. 10 lakh ($123,000) per financial year, which may deter some investors. As an alternative, Gujarat International Finance Tec-City (GIFT City)—India's first International Financial Services Centre (IFSC)—offers a regulated framework for global diversification. Through exchanges like India INX and NSE IFSC, investors can access international markets while mitigating currency risks.

The recent net purchase of Indian equities underscores the market's appeal amid global volatility. Analysts note that India's demographic dividend, fiscal reforms, and corporate governance improvements continue to attract long-term capital. As GIFT City expands its infrastructure and liquidity, it may further enhance India's role as a bridge for cross-border investments.

Source: National Securities Depository Limited (NSDL)

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