The World Bank in the middle of concerns about foreign institutional investors (FIIS) pulled out of Indian markets reaffirmed its confidence in the Indian economic trajectory. The director of the World Bank country in the Assam 2.0 Business Summit Auguste Tano Kouame rejected the worries of short -term fluctuations and described India as “shining light in the world” and urged global investors to earn its growth.
“At the moment we are not afraid of growth of India. We are very bulls about India and stay bulls,” Kouame said, adding that less differences in growth levels do not affect a larger picture. “If someone is afraid of recent data, we would like to say that they are not afraid.” India is the shining light in the world. If you want to invest, then come here and invest. Indian growth makes it a place to invest. ”
Investor concerns in the middle of sales market
Kouame's notes come at the time FII is based on the Indian stock market, which triggers a significant decline in Sensex and Nifty. Since October 2024, global investors have pulled a shares worth almost 2 Lakh Crore, leading to a more than 10% decrease in Sensex. Wider indices were hit heavier, with BSE MIDCAP fallen by 19% and BSE Smallcap retreated 21% in the same period.
The sale continued until 2025, with Fiis unloaded almost 1 lakh crore worth only 33 trading sessions by 14 February. This trend is not exclusive for India, because most of the major developing markets (except Thailand) have also witnessed the negative FII. According to Kotak Securities, India, Brazil, Indonesia, Malaysia, Philippines, South Korea, Tai -Wan and Vietnam, they faced drains, while Thailand was the only exception and attracted $ 17 million in the FII.
Analysts attribute this capital flight to the transfer of global economic policies, in particular the increasing revenues of the US bonds that have made American assets more attractive to investors. Vipul Bhowar, an investment in the head of the Waterfield Advisors Council, explained that higher bond yields in the US caused the FII to turn away from Indian and other shares in the emerging market, which favored the perceived security of US shares.
The contribution to investors' concerns is to slow down the growth of business sales. The combined gross sale of NIFTY50 increased by 6.6% year -on -year in December 2024, from 9.2% in the corresponding quarter of the previous year. This slow growth reduced enthusiasm for Indian shares and further supported exodus of foreign capital.
Despite the strong macroeconomic foundations, the Indian market remains vulnerable to external headwinds. Shrikant Chouhan, head of stock research research in Kotak Securities, noted that markets are currently focusing on the risks of disadvantages, including the US -stored tariffs on Indian exports, uncertainty of domestic growth and inconvenient income in FY25. Given these factors, Chouhan predicts that the flows of foreign portfolio investments (FPI) are likely to remain volatile in the near future.
IMF about India's growth: slowing is temporary
Indian GDP growth in July to September slowed down to a minimum of 5.4%, mainly due to low performance in production and mining sectors and muted consumption. However, the Deputy Director General Git Git Gipinath said last month that the economic slowdown of India was temporary, and the country is expected to reach 6.5% GDP growth in this fiscal year.
“We see it as a temporary thing. Some public infrastructure projects have been delayed, but we can see that it will rise. We continue to see the power in the country's consumption,” Gopinath said in an exclusive interview with business today in an exclusive interview with trade. Gopinath claimed that he was recovery on the horizon and states: “For a fiscal year as a whole, our growth number is 6.5%. So we expect to see recovery. ”
