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India could attract $50-60 billion in foreign inflows over the next few months following the Reserve Bank of India's (RBI) recent measures to lure precious dollars, according to ICICI Securities executives speaking at the ICICI Securities Investor Conference 2026.
On Friday (June 5), the RBI allowed eligible foreign investors to buy long-term government bonds via the Fully Accessible Route (FAR), a framework that allows purchases without investment limits.
The central bank has also removed certain restrictions for foreign portfolio investors (FPIs), increased investment limits for non-resident investors in equities, and announced measures to encourage overseas borrowing and foreign currency deposits.
The central bank had delivered a bazooka of sorts by introducing measures including incentives for foreign currency non-resident (FCNR) deposits and external commercial borrowings (ECBs), said B Prasanna, Head of Investment Banking & Institutional Equities at ICICI Securities.
As a net importer of crude oil, relying on foreign suppliers for nearly 90% of its oil needs, the Indian economy had become exceptionally vulnerable to the war in West Asia, leading to the exodus of nearly $28 billion, taken out by foreign investors, across a variety of assets, including stocks and bonds, this year so far.
The net outflow in the first five months of 2026 has exceeded the total money withdrawn in all of 2025, forcing the government and the central bank to resort to emergency measures to stem the rupee's decline by attracting fresh foreign investment.
Prasanna believes the removal of taxation on certain government bond investments could strengthen India's case for inclusion in major aggregate bond indices, which, in turn, may bring in an additional $20-25 billion in passive inflows over the next financial year.
While the foreign stake in India's large-cap stocks has reduced, the number of stocks FPIs own has increased significantly in the last six years, according to Manoj Menon, Head of Research, Institutional Equities at ICICI Securities.
Many investors in Asia, who are currently underweight India, are preparing to allocate more capital in the coming quarters, particularly to cyclical sectors such as power, defence, metals, and large banks , he added.
The Mumbai-based broking firm estimates earnings growth of 13-14% for the Nifty 50 companies in the financial year ending March 2027, compared to 3.4% in FY25 and 6.9% in FY26.
For the full interview, watch the accompanying videoCatch all the latest updates from the stock market here
On Friday (June 5), the RBI allowed eligible foreign investors to buy long-term government bonds via the Fully Accessible Route (FAR), a framework that allows purchases without investment limits.
The central bank has also removed certain restrictions for foreign portfolio investors (FPIs), increased investment limits for non-resident investors in equities, and announced measures to encourage overseas borrowing and foreign currency deposits.
The central bank had delivered a bazooka of sorts by introducing measures including incentives for foreign currency non-resident (FCNR) deposits and external commercial borrowings (ECBs), said B Prasanna, Head of Investment Banking & Institutional Equities at ICICI Securities.
As a net importer of crude oil, relying on foreign suppliers for nearly 90% of its oil needs, the Indian economy had become exceptionally vulnerable to the war in West Asia, leading to the exodus of nearly $28 billion, taken out by foreign investors, across a variety of assets, including stocks and bonds, this year so far.
The net outflow in the first five months of 2026 has exceeded the total money withdrawn in all of 2025, forcing the government and the central bank to resort to emergency measures to stem the rupee's decline by attracting fresh foreign investment.
Prasanna believes the removal of taxation on certain government bond investments could strengthen India's case for inclusion in major aggregate bond indices, which, in turn, may bring in an additional $20-25 billion in passive inflows over the next financial year.
While the foreign stake in India's large-cap stocks has reduced, the number of stocks FPIs own has increased significantly in the last six years, according to Manoj Menon, Head of Research, Institutional Equities at ICICI Securities.
Many investors in Asia, who are currently underweight India, are preparing to allocate more capital in the coming quarters, particularly to cyclical sectors such as power, defence, metals, and large banks , he added.
The Mumbai-based broking firm estimates earnings growth of 13-14% for the Nifty 50 companies in the financial year ending March 2027, compared to 3.4% in FY25 and 6.9% in FY26.
For the full interview, watch the accompanying videoCatch all the latest updates from the stock market here
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