Foreigners allowed to invest up to $1 b in corporate debt in India

The finance ministry has relaxed investment norms for corporate debt and equity and allowed individual investors and associations from the Gulf countries to invest in Indian equity market as 'Qualified Foreign Investors'.

The relaxation in norms are intended to attract greater inflows of foreign funds and roadshows are being organised in the Gulf countries next month to attract the attention of foreign retail investors.

Such investments by foreign individual investors in equity, mutual funds and corporate bonds are expected to be less volatile.

The ministry, however, has set a $1 billion sub-limit for QFIs in corporate bonds and mutual fund schemes.

''We have received a lot of enquiries from big funds such as family wealth funds of these Gulf countries,'' Thomas Mathew, joint secretary (capital market), in the finance ministry, said.

These countries are not members of the Financial Action Task Force (FATF), while their association Gulf Cooperation Council is. This called for easing some of the norms for overseas investors.