Overseas investors have pumped in a staggering over Rs 1 lakh crore into the Indian debt market since the beginning of the year primarily on account of the Government’s reform agenda.

According to the latest data, foreign investors have purchased debt securities worth Rs 2,82,194 crore in the year so far, while they offloaded bonds to the tune of Rs 1,64,820 crore during the same period, resulting in a net inflow of Rs 1,17,374 crore ($19.45 billion).

These huge inflows included a net investment of Rs 14,900 crore in this month so far.

According to market experts, improved fundamentals of the Indian economy, a decisive mandate to the BJP-led NDA at the Centre, various reform measures announced by the Government and a high interest rate have caught the fancy of overseas investors (foreign institutional investors, sub-accounts and foreign portfolio investors).

The inflow is also significantly higher in debt compared to equities, which till date has attracted Rs 85,330 crore ($14.2 billion).

Interestingly, most of the inflow into Indian debt has gone into Government securities.

Since May 16, when the election results were announced, overseas investors have poured in close to Rs 86,000 crore in the Indian debt market, as the verdict met foreign investors’ expectations in the Lok Sabha polls.

In 2013, foreign investors had pulled out a net Rs 50,848 crore from the country’s bond market.

The strong inflows in recent months have taken the cumulative net investments of foreign investors in the Indian debt market to Rs 2.22 lakh crore, while their investments in dollar terms is $44 billion.

This is based on data since November 1992 when overseas investors began investing in Indian markets.

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