New Delhi: Amidst claims that foreign investors are scrambling to invest in India, the report of National Securities Depository Limited (NSDL) has come out shocking. According to NSDL, there is a 99 percent decline in foreign portfolio investment (FPI) in India by the year 2024. According to NSDL data, net FPI inflows into India have declined from Rs 1.71 lakh crore in 2023 to just Rs 2,026 crore in 2024.
According to economic analysts, this is a result of the lack of confidence in the soft policies of foreign investors and the complete failure of the government to stop the decline of the rupee. This is the reason why FPI inflows have decreased by 99 percent compared to last year.
Apart from this, India has also been shocked by the stimulus package announced by the Chinese government to boost the economy. Due to the stimulus package announced in China, there was investment of 53 billion dollars in Chinese stock markets between 24 September and 8 October. Most of these investments were made from Indian stock markets.
According to financial analysts, on one hand the Indian economy has weakened and on the other hand the American economy has strengthened. In such a situation, the strong position of the American economy in the global markets is also a reason. Investors are turning to the US due to stable stock markets in the US and consistently high interest rates compared to India’s volatile stock market.
As a result of the strong performance of the US economy, most investments have shifted to US bonds, money markets and equities. The strength of American markets has affected emerging markets including India. Apart from this, Indian markets have also become less attractive due to decline in GDP growth rate, decline in industrial production and decline in corporate income growth.
Due to RBI’s strict curbs on unsecured lending in India, prices of banking and finance companies fell, which also reduced the attractiveness of foreign investors. Normally foreign portfolio investment (FPI) invests in financial stocks but Avali Ganga was seen instead. Foreign portfolio investors (FPIs) sold shares worth $35 billion in the banking and finance sector throughout the year.
