New Year Bonanza : Qualified Foreign Investors Can Now Invest in Indian Stock Markets

The government on Sunday gave a New Year gift to the stock markets by allowing qualified foreign investors (QFIs), including overseas individuals, to invest directly in Indian stock markets. So far, QFIs were permitted to invest only in mutual fund schemes.

“As a next logical step, it has now been decided to allow QFIs to directly invest in the Indian equity market in order to widen the class of investors, attract more foreign funds and reduce market volatility and to deepen the Indian capital market,” the finance ministry said in a statement. Detailed norms are expected to be issued by the Securities and Exchange Board of India (Sebi) over the next two weeks.

By allowing QFIs, the government is opening a new avenue for investment, earlier controlled by foreign institutional investors. Foreign nationals, who wanted to invest in Indian stock markets, came through the sub-account route. Non-resident Indians were, however, permitted to invest directly.

“In this arrangement, a large number of Qualified Foreign Investors, in particular, a large set of diversified individual foreign nationals who are desirous of investing in Indian equity market do not have direct access to Indian equity market. In the absence of availability of direct route, many QFIs find difficulties in investing in the Indian equity market,” the finance ministry said.

The move comes at a time when FIIs are withdrawing from Indian equity markets due to problems in their domestic markets.

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Posted on January 2, 2012, in Business and tagged , , , , , , . Bookmark the permalink. 5 Comments.

  1. I guess this is a move in the right direction for our country

  2. I think that this only holds true if you are considering suvival. I would say that my job is motivated by money in that I wouldn’t do it for free at this point in my life. One, because I can’t afford to, and two, because money is at least giving me a sense that my efforts are seen as worthwhile and rewarded. However, I think that once the basics of survival are considered, money becomes less important. I wouldn’t do a different job, just because it paid more money…I also consider work hours, vacation, how much I feel I give and add to people’s lives by doing the job and how the job fits into my worldview.

  1. Pingback: India lifts restrictions on foreign investors | Yechte Consulting Blog

  2. Pingback: India to Relax Rules for Foreign Investors

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