How big have the FPI flows been into India in the last 2 months of November and December 2020?

Foreign portfolio investments into India or the FPI flows crossed Rs.100,000 crore in 33 trading sessions flat since the beginning of November 2020. In fact, the enthusiasm and the optimism started just after the new Samvat Muhurat trading on 27 October and the election of Joe Biden as the next President of the United States.

Since the second of November 2020, the markets have seen more than Rs.1 trillion being infused into Indian equities by these foreign portfolio investors or FPIs. While flows were largely driven by increased weightage for India in the MSCI EM Index, other factors like a Biden victory, sharp turnaround in growth impulses and net profits growth also helped.

Apart from these fundamental factors, the FPI flows also got support from the policy front. The RBI assured low rates and abundant liquidity and a similar assurance has been voiced by the US Fed and other central banks also. That is keeping the FPI liquidity taps flowing. An assurance of sustained monetary accommodation has also been helpful.