To retain the confidence of foreign investors, macroeconomic management is a key

• The inflow of foreign capital into India’s stock market in the month of March hit a high of $4.89 billion, the biggest foreign inflow into Indian stocks since February 2012.
• Both cyclical and structural factors are behind this sudden uptick in foreign investment that has helped the rupee make an impressive comeback.
• Last year, India received more foreign direct investment than China for the first time in two decades. While the Chinese economy has been slowing down considerably in the last one year, India has emerged as the fastest-growing major economy.
• There is a sense among a section of investors that their fears of political instability are misplaced.
• Both the Federal Reserve and the European central bank. for instance, have promised to keep interest rates low for longer. This has caused investors to turn towards relatively high- yielding emerging market debt.

What is foreign investment?

• Foreign investment involves capital flows from one country to another, granting extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment.
• Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country

Good Sign:

• The return of foreign capital is obviously a good sign for the Indian economy. But policymakers need to be careful not to take foreign investors for granted. Other emerging Asian economies will be competing hard to attract foreign capital, which is extremely nimble.
• Any mistake by policymakers will affect India’s image as an investment destination
• The high fiscal deficit of both the Centre and the State governments and the disruptive outflow of foreign capital are the other macroeconomic challenges.

To retain the confidence of foreign investors, macroeconomic management is a key

• The inflow of foreign capital into India’s stock market in the month of March hit a high of $4.89 billion, the biggest foreign inflow into Indian stocks since February 2012.
• Both cyclical and structural factors are behind this sudden uptick in foreign investment that has helped the rupee make an impressive comeback.
• Last year, India received more foreign direct investment than China for the first time in two decades. While the Chinese economy has been slowing down considerably in the last one year, India has emerged as the fastest-growing major economy.
• There is a sense among a section of investors that their fears of political instability are misplaced.
• Both the Federal Reserve and the European central bank. for instance, have promised to keep interest rates low for longer. This has caused investors to turn towards relatively high- yielding emerging market debt.

What is foreign investment?

• Foreign investment involves capital flows from one country to another, granting extensive ownership stakes in domestic companies and assets. Foreign investment denotes that foreigners have an active role in management as a part of their investment.
• Both Foreign Direct Investment (FDI) and Foreign Institutional Investor (FII) are related to investment in a country

Good Sign:

• The return of foreign capital is obviously a good sign for the Indian economy. But policymakers need to be careful not to take foreign investors for granted. Other emerging Asian economies will be competing hard to attract foreign capital, which is extremely nimble.
• Any mistake by policymakers will affect India’s image as an investment destination
• The high fiscal deficit of both the Centre and the State governments and the disruptive outflow of foreign capital are the other macroeconomic challenges.