Emerging Markets Insights: Fund flows improving

Foreign institutional investor (FII) flows into India. Investor flows turned positive in March following a recovery in the equity market, with US$15 billion in flows year-to-date through the end of July. India’s ability to capture an increasing share of foreign institutional flows into emerging markets reflects an improvement in the market’s risk-return profile. Factors include growth-oriented policy continuity, a reduction in inflation and the twin deficits (fiscal and current account balances), and increased spending toward infrastructure projects that increase capacity and productivity..