News / Asia

India Opens Stock Markets to Individual Foreign Investors

India announced on January 1, 2011 that it would open up its stock market to individual foreign investors for the first time, in a major economic reform designed to boost overseas investment, (File).
India announced on January 1, 2011 that it would open up its stock market to individual foreign investors for the first time, in a major economic reform designed to boost overseas investment, (File).

India is hoping to attract more overseas funds as it opens its stock markets to individual foreign investors for the first time, but it may not be easy as the allure of the Indian stock markets fades amid a faltering economy.     

Starting January 15, the government has announced that individual foreign investors can directly buy and sell Indian equities. Earlier, they could only invest through mutual funds or institutional investors.

Officials hope the move will reverse last year's trend that saw foreign investors pulling out billions of dollars from the Indian economy. The government also wants to reduce market volatility.

But many economists say it is not likely to have an immediate impact at a time when Indian equities have been ranked among the world’s worst performers after losing as much as one quarter of their value in the last year.   

Anushree Sinha is an economist at the National Council of Applied Economic Research.

“If the market is not very healthy, then the investors will worry, and I don’t think it will happen so smoothly, Sinha stated. "So I think we will have to put our house in order to get foreign investment.”

In 2011, net foreign inflows in the Indian markets added up to a paltry $380 million compared to $29 billion in 2010. That is bad news for a country that has relied heavily on such foreign investment for liquidity.  

The European debt crisis and sluggish Western economies were blamed for the drop in outside investors, but domestic factors also played a role.

Last year in India inflation remained high and growth began to plummet following a series of interest rate hikes. The rupee hit a record low against the dollar and has depreciated by nearly 20 percent in the last six months.

Economist Sinha says economic growth will clearly not reach the nine per cent level the government had forecast at the start of 2011. “The last year will see a major slowdown. They expected to curb inflation and improve growth which just did not happen," he explained. "They were trying to reduce demand in an excessive manner.”     

India is ranked as one of the world’s fastest growing economies, but analysts say recent months have shown the global economic slowdown has been taking its toll.

You May Like

Video Is West Doing Enough to Tackle Islamic State?

There is growing uncertainty over whether West’s response to ISIS is adequate More

China Crackdown on Dual Citizens Causes Concern

New policy encourages reporting people who obtain citizenship in another country, but retain Chinese citizenship; move spurs sharp debate More

Video Coalition to Fight Islamic State Could Reward Assad

Losing ground to Islamic State fighters, Syria's government says it is ready to cooperate with international community More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Is West Doing Enough to Tackle Islamic State?i
X
Henry Ridgwell
August 29, 2014 12:26 AM
U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Pachyderms Play Polo to Raise Money for Elephants

Polo, the ancient team competition typically played on horseback, is known as the “sport of kings.” However, the royal version for one annual event in Thailand swaps the horse for the kingdom’s national symbol - the elephant. VOA Correspondent Steve Herman in Samut Prakan reports that the King’s Cup Elephant Polo tournament is all for a good cause.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.
Video

Video America's Most Popular Artworks Displayed in Public Places

Public places in cities across America were turned into open-air art galleries in August. Pictures of the nation’s most popular artworks were displayed on billboards, bus shelters, subway platforms and more. The idea behind “Art Everywhere,” a collaborative campaign by five major museums is to allow more people to enjoy art and learn about the country’s culture and history. Faiza Elmasry has more.
Video

Video Chinese Doctors Use 3-D Spinal Implant

A Chinese boy suffering from a debilitating bone disease has become the first patient with a part of his spine created in a three-dimensional printer. Doctors say he will soon regain normal mobility. VOA’s George Putic reports.
Video

Video Uneasy Calm Settles Over Israel, Gaza Strip

Israel and the Gaza Strip have been calm since a cease-fire set in Tuesday evening, ending seven weeks of hostilities. Hamas, which controls Gaza, declared victory. Israelis were more wart. VOA’s Scott Bobb reports from Jerusalem.
Video

Video India’s Leprosy Battle Stymied by Continuing Stigma

Medical advancements in the treatment of leprosy have greatly diminished its impact around the world, largely eliminating the disease from most countries. India made great strides in combating leprosy, but still accounts for a majority of the world’s new cases each year, and the number of newly infected Indians is rising - more than 130,000 recorded last year. Doctors there say the problem has more to do with society than science. Shaikh Azizur Rahman reports from Kolkata.
Video

Video Scientists Unlock Mystery of Bird Flocks

How can flocks of birds, schools of fish or herds of antelope suddenly change direction -- all the individuals adjusting their movement in concert, at seemingly the same time? British researchers now have some insights into this behavior, which has puzzled scientists for a long time. VOA's George Putic has more.

AppleAndroid