India May Allow Foreign Access to Equity Markets

By admin • August 9th, 2010

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A panel set up by the Indian government has recommended to the Indian finance ministry that the country should make it easier for foreigners to purchase shares on Indian exchanges by opening up India’s equity markets to foreign retail investors.

The Indian finance ministry has stated they wish to capitalise on India’s remarkable growth by attracting more foreign investors and easing foreign access to equity markets could be a possible way of doing so. The plans to open the markets to foreign retail investors has been given to the central bank in India and India’s market regulator as they would have to create the framework to protect investors.

So far this year $11bn has been invested into Indian equities from foreign institutional investors. This is a significant increase compared to $7.5bn at this period last year and analysts predict this year may see a high of $17bn.

This proposal comes on the back of India’s exchanges upgrading technology in an effort to attract fast computer-driven trading for a large share on US and European stock exchanges.

If the equity markets were to open it would boost India’s economy even further. Currently the economy is growing at 8.5% as a result of strong domestic demand.

International Government Affairs & Corporate Relations Consultants for Emerging Markets

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