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

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level 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.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid