Exclusive: India set to double investment limit for foreign individuals, sources, memo say
Exclusive: India set to double investment limit for foreign individuals, sources, memo say
NEW DELHI, March 27 (Reuters) - India's central bank is set to double to 10% a cap on investment by individual foreign investors in listed companies, as it aims to boost capital inflows, according to two senior government officials and documents reviewed by Reuters.
Foreign portfolio investors (FPIs), pressured by poor earnings, high valuations and prospects of U.S. tariffs, have pulled more than $28 billion out of Indian stocks since September's record high in the benchmark NSE Nifty
To boost foreign investment, India is widening to all foreign investors benefits it had until now restricted to overseas Indians, while also raising applicable investment limits, the officials said.
"It is felt that these proposals may be implemented as early as possible," the central bank told the government in a letter last week, pointing to disruption in capital inflows among recent developments in the external sector.
Emails seeking comment from the finance ministry, the central bank, and the market regulator, the Securities and Exchange Board of India (SEBI), did not get any response.
The plans envisage allowing all foreign individual investors to invest a maximum of 10% in a listed company, the document showed.
That is up from the 5% holding in an Indian company allowed to overseas Indian citizens by special rules under the Foreign Exchange Management Act (FEMA).
