Market Compass for India

Securities market in India has witnessed continuous reform initiatives to create an efficient and robust market infrastructure, in turn, expanding the investment opportunities for investors with new instruments and products and protecting the interests of investors

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India is the world’s second-most populous country with over 1.33 billion people (source: World Bank, United States Census Bureau) and boasts a rich cultural heritage including numerous languages, traditions and people. Its young population provides a strong driver for growth and an ample source of manpower. While the economy has welcomed international investment since liberalisation started in the 1990s, the Indian government has been pro-active and supportive but prudent in adopting new global approaches.

Indian Capital Markets have shown tremendous growth in the post liberalization era. It remains one of the most resilient globally and poised to be one of the top destinations for domestic and global businesses to expand and invest. As global economy moves for imminent recovery, India has shown extraordinary strength to bounce back with greater stability and sustainability. Raising capital is a strategic priority across India and role of capital markets has assumed far greater importance and urgency.

According to a recent market attractiveness survey conducted by the Emerging Market Private Equity Association (EMPEA) in 2019, India has become the most attractive emerging market for global investment.

The current Prime Minister of India, Narendra Modi, has made attracting international investment a cornerstone of his government policies. The government stated its objective to more than double the nation’s gross domestic product to USD 5 trillion by 2024 (as stated by the current Finance Minister Nirmala Sitharaman in the Union Budget 2019-20), a task it has undertaken with the support of fiscal prudence and improved access to financial markets.

Initiatives to attract foreign investments include efforts by the individual industry ministries to ease the rules and regulations related to foreign investment. In 2019, the Securities and Exchange Board of India (SEBI) allowed foreign investors to directly invest into listed corporations via share and debenture ownership, for example. In addition to launching attractive policies for investors, the ministries are also providing greater assistance to support and encourage international investment.

In 2019, India ranked 63 of 190 countries assessed by the World Bank for ease of doing business. India’s leap up 14 places since 2018 is significant considering that there has been continuous improvement since 2015. In the World Bank’s Doing Business Report 2020, India also improved its rank by 79 positions in the last five years – clear demonstration of the success of government efforts.

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