Foreign investors pump $20 bn into India in January-June 2014

Foreign investors have pumped in a whopping $20 billion into Indian market in the first half of the year, hoping to make a fast buck on the back of a reform-oriented government in power at the centre.

This includes a net $9.96 billion (Rs59,795 crore) that foreigners invested in Indian equities and $10.42 billion (Rs62,834 crore) they invested in debt during January-June 2014.

The total adds up to $20.4 billion (Rs1,23,000 crore), data available with market regulator Securities and Exchange Board of India (SEBI) showed.

Foreign investors had invested a net Rs62,288 crore into the country's securities market in the whole of 2013 (January- December). Total investment in equities during the year stood at Rs1,13,000 crore even as foreign investors pulled out a net Rs50,848 crore from the market.

Foreign institutional investors (FIIs), the main driver of the equity market, have helped in pushing up the benchmark BSE Sensex by over 20 per cent in the first six-month of the year.

SEBI has clubbed together foreign institutional investors (FIIs), their sub-accounts as also qualified foreign investors to create a new investor category called foreign portfolio investors (FPIs), beginning June this year.

As of now, foreign investors continue their positive bias towards Indian markets primarily on the expectations of reform-oriented decisions from the new government. The inflows are expected to surge if the budget to be presented in Parliament on 10 July turns out to be positive for foreign investors.

Based on data available since November 1992, cumulative net investments by foreigners in India stands at $191 billion (Rs9,00,000 crore).

This includes about $156 billion investments in equities and about $35 billion in debt.