The Centre is regularly holding consultations with stakeholders to streamline foreign direct investments (FDIs) and foreign institutional investments (FIIs) related processes to enable faster and more efficient investment flows into the country, said Commerce and Industry Minister Piyush Goyal, adding one such meeting with stakeholders was held on Tuesday.
The stock market is likely to continue with its positive momentum but may face bouts of profit-booking amid lofty valuations in this holiday-shortened week, analysts said. The trading sentiment will be guided mostly by global trends in absence of major domestic events, they said. Markets would remain closed on Friday for 'Ganesh Chaturthi'.
India's rupee is likely to remain under pressure due to high prices of crude oil and other commodities, and may stabilise at around 79-80 against the US dollar in the near term, say experts amid limited headroom available with the Reserve Bank to check the weakening of the domestic currency. The currency has slumped over 5 per cent this year after Russia's invasion of Ukraine sent international crude oil prices soaring to a decade high. On Monday, rupee ended at a fresh all-time low of 78.34 (provisional) against the US dollar.
The government would try to minimise layers in FDI ceilings.
Even so, whenever a hitherto closed sector has been opened to FDI or the sectoral investment cap has been raised, the move has drawn strong protest. The latest instance is multi-brand retail.
'The inflow of FII or FDI has not distorted the market sentiments and therefore there is no question of putting any curbs.'
The finance ministry has suggested easing of the rules for calculating foreign investment in a company. The proposed rules, which take out sundry entries of indirect investment, will make life easier for companies, which have high foreign institutional investment and face the risk of breaching sector-specific caps.
The government has decided to do away with the various classifications of foreign investments for the purpose of calculating foreign investment in downstream companies.
Volatility in investments concern for RBI.
The rupee on Wednesday rose to nearly two-month high of 45.38/39 a dollar by registering a smart 24-paise gain against the US currency on dollar selling amid sustained capital inflows.
Continuing its offensive on the United Progressive Alliance over its failure to curb the rising prices of essential commodities, the Communist Party of India-Marxist on Monday said it will stall the passage of the Forward Contract Regulation Amendment Bill, which will enable foreign direct investment and foreign institutional investment in the commodities market, in Parliament.
Presently, the government allows foreign investments of up to $15billion in corporate bonds and upto $5 billion in government bonds.
Announcing the measures, Finance Minister P Chidambaram said the Reserve Bank of India had agreed to release Rs 25,000 crore immediately to lending institutions.
The government on Friday increased the foreign institutional investment limit to $15 billion from $6 billion in domestic corporate bonds, a move that will provide a boost to foreign inflows into the country.
Finance Minister P Chidambaram said on Tuesday the inflow of foreign funds in the banking system was not disorderly and could be channelled for productive use. There was large inflow of capital mainly from export earnings, remittances, foreign direct investment, foreign institutional investments and private equity, he said.
The Union ministry of consumer affairs has given the finishing touches to the policy framework to allow foreign direct investment and foreign institutional investment in India's national commodity exchanges.
Foreign institutional investment flows remain key driver for the Indian markets.\n
Reflecting the continued interest in Indian equity markets, foreign institutional investments this year have crossed the four billion dollar mark.
The Associated Chambers of Commerce and Industry of India has predicted that the foreign institutional investment inflow into India will touch the $50 billion mark as compared to $40 billion in 2005.
Sensex and Nifty have been volatile in the past one year on domestic and global worries.
While FIIs have pumped in nearly Rs 17,000 crore, MFs have been net buyers to the tune of Rs 9,000 crore.
The government on Friday hiked foreign investment ceiling in private banks from 49 to 74 per cent and allowed foreign banks to set up subsidiaries in the country.
Foreign investment in news channels includes FDI, FII, External Commercial Borrowings and investment by NRIs.
India's foreign exchange reserves, now at $100.05 billion, is expected to reach $104 billion by March, but its high growth may slow down due to rising trade deficit, according to the Institute of Economic Growth.
Foreign institutional investments in equities soared by 43 per cent to over $9.43 billion this year pushing the Sensex to intra-day record high of 6,409 on Wednesday.
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