Financial Year (FY) 2020-21 witnessed strong Foreign Portfolio Investment (FPI) inflows into the Indian equity markets of ₹ 2,74,034 crore, thus, reflecting steadfast confidence of foreign investors in the fundamentals of the Indian Economy.

FY 2020-21	Net investment in Equity (in Rs Crs)
April	-6884
May	14569
June	21832
July	7563
August	47080
September	-7783
October	19541
November	60358
December	62016
January	19473
February	25787
March	10952
Total for FY 20-21	274034

Up to 1^st April 2021; source: NSDL

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. 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 growth forecast for India in FY 2021-22 have 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.

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RM/MV/KMN

FPI regulatory reform boosts foreign equity inflows by improving access and investment climate in Indian markets. Foreign Portfolio Investment inflows into Indian equity markets totalled Rs. 2,74,034 crore in FY 2020 21. The rise in equity FPI inflows is linked to a faster economic recovery, stimulus measures, and targeted policy reforms: simplification and rationalisation of the FPI regulatory regime, an online Common Application Form for SEBI registration, streamlined PAN allotment, and facilitation of bank and Demat account opening. Raising the aggregate FPI investment limit from 24% to the sectoral cap increased index weightage and attracted passive and active foreign capital.