Union Budget 2019: More doors opened for FPI, NRI investments

Mumbai: Through the Union Budget, the  government has tried to attract higher as well as more Foreign Portfolio Investors (FPI) and Non Resident Indians (NRIs) to invest in the Indian capital market along with foreign direct investment route.

Accordingly the Finance Minister proposed to increase the statutory limit for FPI investment in a company from 24 per cent to sectoral foreign investment limit to raise availability of investible stock to the FPIs in a listed company.

"An important determinant of attracting cross-border investments is availability of investible stock to the Foreign Portfolio Investors (FPIs). This issue assumes greater significance in view of the gradual shift, from stock targeted investments, towards passive investment whereby funds track global indices composition of which depends upon available floating stock," FM said.

Also FPIs will be permitted to subscribe to listed debt securities issued by real estate investment trusts or REITs and infrastructure investment trusts or InvITs.

Real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) are innovative vehicles that allow developers to monetise revenue-generating real estate and infrastructure assets, while enabling investors or unit holders to invest in these assets without actually owning them.

The FM also proposed to make Indian capital market more investor friendly for FPIs by making compliance to KYC norms hassle free.