Inflows of US$ 10.1bn in December 2320 are the highest ever monthly inflows recorded in a single month, a research by Bank of Baroda said.
Mumbai: In the closing month of 2023, a significant financial milestone was recorded in India – a staggering influx of US$ 10.1 billion, an amount charted as the highest ever for a single month. This statistic, as per a report published by the Bank of Baroda, marks a radical swing in foreign portfolio investment (FPI) flows pouring into the Indian landscape. Going back to 2023, the financial report revealed that India had drawn in an impressive US$ 28.7 billion, a stark contrast against the recorded outflows of US$ 17.9 billion in the year prior to that. This positive shift clearly indicates the mounting faith of overseas investors in Indian markets, as per a report by news agency IANS.
FPI Inflows In 2023 Highest Since 2017
“Inflows in 2023 were the highest since 2017, when FPIs poured in US$ 30.8bn in the domestic market. However, true to their nature, FPI flows exhibited a great deal of volatility throughout the year,” the report said. The report said that after a dismal start, FPI flow into India picked up pace, cumulatively totaling US$ 28.7bn in 2023.
“While equity segment continued to outperform, encouraging trend was also visible in the debt segment, particularly in the last few months of the year,” the report said.
Reasons Behind Rise In FPI Inflow
It said that improved corporate profitability, stable domestic macros, range-bound inflation and a stable political environment favour India as a preferred investment destination. The report said that India’s inclusion in JP Morgan’s bond index on June 24 as well as hopes that India might subsequently be included in other bond indices have been key drivers of FPI inflows in the debt segment.
“The trend is likely to persist and gather more pace in the first two quarters of 2024,” the report said. It said that this will be positive for INR, which is likely to trade with an appreciating bias in 2024.
First Two Quarters To See Good FPI Inflows, Says BoB Report
After a dismal start, foreign portfolio investments (FPI) flow into India picked up pace, cumulatively totaling $28.7 billion in 2023, said a report by the Bank of Baroda. The report also said the trend will continue and be positive for the Indian rupee, which is likely to appreciate. The report said that FPI into India closed at 28.7 billion last calendar year.
“While the equity segment continued to outperform, an encouraging trend was also visible in the debt segment, particularly in the last few months of the year,” the report said. It was also said that improved corporate profitability, stable domestic macros, range-bound inflation and a stable political environment favour India as a preferred investment destination.
“India’s inclusion in JP Morgan’s bond index in June’24 as well as hopes that India might subsequently be included in other bond indices have been key drivers of FPI inflows in the debt segment,” the report said. It said that the trend is likely to persist and gather more pace in the first two quarters of 2024.
“This will be positive for the Indian rupee, which is likely to trade with an appreciating bias in 2024,” the report said.
(With inputs from agencies)