To enhance the global competitiveness of Indian stock exchanges and accelerate adoption of best-in-class technology and global market practices, the Union Budget has proposed to increase the investment limit for foreign entities in Indian stock exchanges to 15 per cent from 5 per cent — at par with domestic institutions.
Welcoming the move, Ashishkumar Chauhan, MD & CEO, BSE, said, “This is expected to improve the functioning of Indian stock exchanges and bring them on par with the best exchanges in the world.
This will also help attract more investments into India by creating stronger links with the best foreign exchanges.”
V Aditya Srinivas, Chief Operating Officer & Chief Economist, BSE Brokers Forum, said “The increasing investment limit of foreign investors in stock exchanges will push the financial services sector for higher growth trajectory along with financial inclusion.”
Market experts observed that investment in stock exchanges needed a very long-term view which foreign investors could afford to have.
Tejesh Chitlangi, Partner, IC Legal, said, “The proposal to increase foreign shareholding in stock exchanges to 15 per cent is a good move as the current 5 per cent limit is low and challenging from the perspective of new entrants. However, the not-so-good experience of the existing foreign investors in the exchange segment may act as a dampener.”