A government panel set up to explore ways of increasing foreign capital inflows is urging the Finance Ministry to make it easier for foreigners – particularly those of Indian origin – to buy shares on Indian exchanges, a person who worked on the panel told the paper.
The FT quotes Ashvin Parekh, a partner at consultancy Ernst and Young, who has been working with the Finance Ministry on the project as saying: “The Finance Ministry has accepted the recommendations in principle as it wants to capitalise on India’s incredible growth by attracting more foreign investors.”
Foreign institutional investors were first allowed to invest in India, which is the third largest Asian economy, 18 years ago and foreign-owned brokers commonly trade directly on India’s exchanges, however individual or retail investors are banned from doing so.
Mr Parekh said the plan to open the market to retail investors abroad had been passed on to India’s market regulator and central bank, which would have to create a framework to protect foreigners’ interests.
