Amid large capital outflows, downward pressure on the rupee and reserve drawdowns, the Reserve Bank of India (RBI) announced on July 6 a slew of measures to attract greater foreign exchange flows to India. “In order to further diversify and expand the sources of forex funding so as to mitigate volatility and dampen global spillovers, it has been decided to undertake measures to enhance forex inflows while ensuring overall macroeconomic and financial stability”, the RBI said in its

For the past nine months, foreign portfolio investors (FPIs) have been on a heavy selling spree in the Indian financial markets. According to data compiled by the National Securities Depository Limited, FPIs have pulled out a whopping Rs.255879 crore (US $33.5 billion) from equity and Rs.16621 crore ($2.1 billion) from debt segments of Indian financial markets, for a total net outflow of Rs.271950 crore ($35.6 billion) over the period October 2021 to June 2022 (see Table 1). In…