Signs of India's economic recovery appear to have lifted confidence among foreign investors as the flow of foreign investment has surged five times in the April-June quarter to $15 billion.
As against the flow of nearly $3 billion in the preceding quarter of Jan-March, the direct and portfolio investments flow together rose sharply to $15 billion during April-June quarter this year, data released by RBI revealed.
Of the total investment flows during the quarter, portfolio investments accounted for $8.270 billion, while direct inflows contributed $7.016 billion to the total flows, Reserve Bank data showed.
In the three months ended March, 2009, total inflow into the domestic market was a mere $3.589 billion.
Foreign fund inflows had sharply declined in FY'09 after the global financial turmoil triggered panic among foreign institutional investors, prompting them to pull out money from emerging markets.
While the country received a total investment of $61.633 billion in 2007-08, for the full financial year ended March 31, 2009, total investments dropped to $21.313 billion.
Of the total fund flows that reached the country in 2008-09, direct investment contributed $35.168 billion while portfolio investments posted a negative flow of $13.855 billion.