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FDI Inflows Continued “Unabated” Despite Pandemic: Finance Minister

Finance Minister Nirmala Sitharaman stated FDI inflows have continued regardless of pandemic

Despite abroad traders having pulled out a web Rs 1,14,856 crore from the Indian markets in 2021-22 and international portfolio traders (FPIs) having bought home equities value Rs 48,261 crore in March 2022 alone, Finance Minister Nirmala Sitharaman on Monday informed Parliament that international direct investments (FDIs) influx has remained “unabated”.

To a query by Congress MP Shashi Tharoor on what the federal government plans to do to reverse the development of international traders pulling out funds, the Finance Minister intervened whilst her junior colleague Pankaj Chaudhary was making an attempt to reply, and stated that “FPIs and foreign institutional investors (FIIs) are obviously going to be, as it is typical of their very nature, coming in and going out. But what has got to be looked at, with fairness and objectivity, is the inflow of FDIs which has remained unabated. India is the highest receiver of FDIs since before COVID and that continues during COVID”.

Replying to the query in Lok Sabha, the Finance Minister added that “In fact, it (FDI) continues very much significantly during COVID and subsequently also. It is that which indicates if the money which is coming in, is staying invested in this country thereby creating jobs and prospects for us, and not by indicating only the FIIs and FPIs… FIIs and FPIs may come and go but today Indian retail investors have proven that even if they come and go, any shock that may come is now taken care of because of the shock-absorbing capacity the Indian retailer has brought into Indian market. I think we as a House should stand up and appreciate the Indian retailer who has invested a lot of confidence in the stock market today in India”.

Ms Sitharaman stated that investments should be gauged not simply by FIIs and FPIs, which by their very nature take a look at rates of interest that preserve transferring up and down, however by the regular influx of FDI within the nation.

She added that “FIIs and FPIs can be very tempted by interest rates elsewhere and prospects anywhere else as well”.

Expressing concern over the truth that March was the sixth straight month when FIIs withdrew from positions within the Indian fairness market, Mr Tharoor whereas asking the query, had stated that the “worrying” development could also be exacerbated by the US rates of interest hike and commodity worth hikes, notably of crude oil.

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