India’s Finance Minister Comments on Market Liquidity and Investor Exits
Indian Finance Minister Nirmala Sitharaman highlighted that high liquidity in India's equity market has made it easier for foreign investors to exit their holdings. Despite a nearly 12% decline in key benchmark indices since January, the Indian economy remains resilient amid trade uncertainty and geopolitical challenges. Sitharaman noted concerns over capital flows shifting toward AI-driven markets like the U.S., Taiwan, and South Korea at India's expense. She also identified fuel, fertilizer costs, and access to capital as major risks for 2027 but expressed confidence that a potential global AI bubble burst would not significantly impact India. Domestic investment in Indian equity mutual funds has remained strong since March 2021, while foreign portfolio investors have recorded significant outflows. The finance minister emphasized ongoing efforts to strengthen frontier tech and semiconductor manufacturing.
Topics: Equity Markets Foreign Investment Government Policy India