Foreign National: Exposure to Indian Equity through Indian Mutual Funds

Foreign National - Invest in Indian Equity via Mutual Funds
Indian Regulators have followed a progressive but conservative approach to invite foreign capital in the domestic market. Currently Foreign Direct Investment (FDI), Foreign Institutional Investments (FII) and Non Resident Indian (NRI) Investment are the routes to receive Foreign Capital in the Indian economy. Foreign nationals can take exposure to Indian equity by subscribing to India dedicated funds floated by FII or open sub – accounts with an FII.

During the budget speech in February 2011, the Indian Finance Minister, Mr. Pranab Mukherjee announced further liberalization by declaring intentions to permit any foreign national to directly subscribe to Mutual Fund Schemes managed by domestic asset management companies.

Currently India is one of the fastest growing economies in the world expected to grow at a pace of 10 to 12%. Equity exposure on Indian Equity over the next two decades is likely to generate extremely attractive returns in a relatively safe and stable economy. Any sensible global investor would want to be a party to the growth. The announcement opens up an opportunity to foreign nationals to go through the Indian Mutual Funds who have the necessary experience and proven performance track record.

As a leading financial services provider with over 2 ½ decades of experience behind us, we can help you channelise your investment in the Indian Mutual Funds. We are a registered distributor with all leading Indian Mutual Funds.

The detailed procedures and guidelines are being worked out by the fund houses. In the meantime, we would be glad to update you with relevant development. Please register yourself for receiving the communications on the subject.

To Register Click Here

Union Finance Minister, Mr. Pranab Mukherjee while releasing Budget 2011 – 12 in Indian Parliament on 28th February 2011 stated the following:
Point No. 32:
“Foreign Institutional Investors”

32. Currently,only FII's and sub-accounts registered with the SEBI and NRIs are allowed to invest in mutual fund schemes. To liberalise the portfolio investment route, it has been decided to permit SEBI registered Mutual Funds to accept subscriptions from foreign investors who meet the KYC requirements for equity schemes. This would enable Indian Mutual Funds to have direct access to foreign investors and widen the class of foreign investors in Indian equity market.”

Excerpts from the communication to reporters by Mr. K. M. Vaidyanathan, Executive Director, SEBI (Indian Capital Market Regulator) on March 11, 2011.

“SEBI will issue the guidelines allowing foreign investors to invest in mutual funds shortly...We are working with the Reserve Bank of India and the finance ministry (for allowing foreign investors' entry into mutual funds... It is a matter of weeks and not months,"