Reform pace to set inflow trend back

The long-term view on India is intact and if economic reforms continue, the economy has the potential to see much larger inflows from foreign investors, feels Clark B Winter Jr, chief global investment strategist, Citigroup Global Wealth Management.

"This is a vibrant place to put money to work. Like so many other countries around the world, India is enjoying a series of reforms that encourage people to put money to work, which creates jobs. It is not unique; it is going on in many other countries of the world. But the scale with which it is happening in India is unparallel," said Winter.

On the recent fall in equity markets, Winter said flow of money into emerging markets accelerated during the last few months and in some countries it was accompanied by speculation. That was a worldwide phenomenon and not an India-specific event.

For many countries this was a first-time phenomenon (where markets witnessed significant sell off by foreign investors).

"But it is not first time in the globe, it is just the first time they are going through such a thing," he said, adding, "long term prospects about India are still optimistic. In the short term, we now know that markets were overvalued."

Winter is in India in connection with Citigroup launching its wealth management services here. The group would offer online and brick and mortar broking services and equity research to retail clients.

This business is expected to start by the last quarter of this calendar year. Citigroup will be the second large multinational bank to set up retail broking services in the country.