The newly introduced common application form (CAF) is expected to help. CAF obviates the need for FPIs to have their documents attested by Apostille or by the Indian High Commission. It is supposed to provide single window clearance, wherein applicants fill one electronic form and obtain registration with Sebi, PAN from the income tax department, KYC and open bank and demat accounts in India.
The pandemic erased over $18 trillion from global markets
in February and March, before a recovery from April, according to World Federation of Exchanges.
FPIs sold stocks worth Rs 64,000 crore between February and April before turning net buyers in May and June, driven by ultra-loose monetary conditions overseas. They remain net sellers to the tune of Rs 22,000 crore this year.
“There was a pause in decision-making among FPIs... That will change now and we may see some interest come back in the next few months. It will be a gradual process, however,” said a person who deals with FPIs.
Analysts believe countries like India might see a long drawn-out recovery, given the low per capita income, poor healthcare facilities, and large population. “While FPI flows may continue in India given risk-on sentiment and the weakening USD outlook, compared to other Ems (emerging markets), it will likely remain modest until economic growth recovers, which is still some time away, in our view. Hence, we suggest that investors avoid chasing market rallies and maintain a defensive stance,” said Jitendra Gohil, head of India Equity Research, Credit Suisse Wealth Management, India, in a recent note.