The Indian government's decision to allow qualified foreign investors (QFIs) to directly invest in the Indian equity market is meant to "widen the class of investors, attract more foreign funds, reduce market volatility and deepen the Indian capital market," according to an Indian government statement posted on its website.
The Securities and Exchange Board of India (Sebi) and the Reserve Bank of India (RBI) are expected to issue relevant circulars to put the scheme into operation by January 15, it added.
"QFIs have been already permitted to have direct access to Indian mutual funds schemes pursuant to the Budget announcement 2011-12. Today's decision is a next logical step in the direction," said the government.
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