Foreign Institutional Investors have invested in large amounts on Indian markets in November 2020. With only five more days remaining for the month, foreign institutional investors have bought shares worth Rs. 53, 167 Crores setting a record as the highest investment amount ever received in Indian history. Taking into consideration the low-interest rates across first-world countries, there seems to be a shift in the approach of risk assets, especially in developing countries. There might be several factors for why India has become a lucrative option for foreign investors. India is touted to be one of the few emerging economies that have the capacity to overcome the adverse effects covid brought instilled on its economy. Developing economies have lagged behind the first world countries for some time and there seems to be a view that this might be the time for the developing countries to catch up to their first world counterparts. Among the developing countries, India is seen as the worst-hit country from covid alongside brazil but as we could see for the past few weeks, the curve seems to have flattened to some extent, and normalcy is expected to return soon. Since Joe Biden is now elected as the president of the united states with trump going out of the picture, we might not see far-right economic policies of the last administration of the united states which is going to transform some of the assets that were chained in long term shares and see it being distributed somewhere else. We should also not forget that the foreign institutional investors were the worst hit in the month of March 2020, when the government of India had announced a total lockdown of 21 days in order to curb the spread of coronavirus, affecting a lot of business. The FIIS had pulled out Rs.1.18 lakh crore solely in the month of March. The recent passing of reforms from the government on the farm as well as labor reforms has also increased the confidence of the foreign institutional investors. Asian and Southeast Asian economies have seen the largest peak of foreign investment this year for the past 7 years. Since 1 October, nine regional stock markets have seen gross inflows of about $48 billion, most of them since the fourth quarter of 2013.
Japan received the largest entry of US$27.4 billion followed by India at US$9.2 billion and South Korea at US$6.4 billion. Southeast Asian countries such as Vietnam has managed to curtail coronavirus which allowed it to quickly to restart businesses and is now touted to be one of the world’s fastest-growing market this year.
