Econintersect: The government has freed Indian mutual funds to accept foreign investors. Prior to this new policy, only foreign investors registered with market regulator SEBI (Securities and Exchange Board of India) have been allowed to participate. These have included both individuals and institutional investors.
The move is not expected initially to increase significant participation of foreign individuals in the Indian stock market, but an increase in institutional investment is anticipated. Longer term retail investors in other countries may become more common. Currency exchange inconveniences are a primary inhibitor for foreign individual investors.
Submitted by Sanjeev Kulkarni