Seek long-term capital

Overdependence on foreign debt must be avoided

Foreign portfolio investment, or FPI, continues to pour into India. So far, the month of July has seen an inflow of about $2.4 billion, taking the total for the year up to approximately $25 billion. Much of this came in a great surge in March, perhaps after the Bharatiya Janata Party’s victory in the Uttar Pradesh assembly elections raised expectations of a revived reform agenda. So far in July, the vast majority of the funds have flowed into debt. In fact, it could be argued that the authorities have aided the flow of foreign portfolio investment into Indian debt; the