India's reliance on FII flows reduces; trend seen as positive for economy

FII flows as a percentage of FDI lowest since 2003; trend seen as positive for the economy

The flows from foreign institutional investors (FIIs) into India have been thinning, but there is reason to cheer, given the share of foreign direct investments (FDIs) in overall foreign flows is gaining prominence. 

The shift in balance has reduced the share of portfolio flows into equities as a percentage of FDI to its lowest level in the last 14 years.

Experts say this trend is favourable for the domestic economy as FDI money, unlike FII flows, is less bound by short-term gains and therefore less volatile. “The good news is that a large part of capital flows coming into India