Despite the outbreak of Covid-19 pandemic, Financial Year (FY) 2020-21 witnessed strong Foreign Portfolio Investment (FPI) inflows into the Indian equity markets of Rs 2,74,034 crore, thus, reflecting steadfast confidence of foreign investors in the fundamentals of the Indian economy.

During the financial year 2020-21, between April and September, there were outflows of Rs 6,884 crore and Rs 7,783 crore respectively.

“The robust FPI flows came on the back of faster than expected economic recovery supported by multiple tranches of innovatively designed stimulus packages. The Government and regulators had also undertaken major policy initiatives directed at improving ease of access and investment climate for FPIs in the recent past,” the Ministry of Finance said in a statement.

These include simplification and rationalisation of the FPI regulatory regime, operationalisation of the online Common Application Form (CAF) for the purpose of registration with SEBI, allotment of PAN and opening of bank and Demat accounts etc.

The increase in aggregate FPI investment limit in Indian companies from 24% to the sectoral cap has been a catalyst for increase in weightage of Indian securities in major equity indices, thus mobilising massive equity inflows, both passive and active, into Indian capital markets, the Finance Ministry said.

The statement added that the growth forecast for India in FY 2021-22 has been pegged above 10% by the World Bank, IMF and several global research organisations underscoring that India will continue to remain an attractive investment destination in the near future.