Modi Govt Faces Economic Setback as Foreign Investors Exit India

Foreign investors are increasingly reducing their investments in Indian markets, raising concerns about the country’s economic policies under Prime Minister Narendra Modi.

According to Indian magazine The Wire, foreign investors have been selling Indian government bonds and moving their money to developed markets for safer and better returns.

Foreign investors have sold Indian bonds worth Rs9.87 billion since August, The Wire reported.

The widening difference in interest rates is also making Indian markets less attractive to foreign investors. The decision by Bloomberg not to include Indian local debt in its global market indicators has also affected investment interest, according to the report.

Indian journalist Abhinav Trivedi said lower returns, high valuations, a weak currency and higher taxes are reducing the appeal of Indian markets for global investors.

The report said that instead of addressing India’s financial weaknesses, the government’s economic policies have raised concerns about the country’s economic credibility among global investors.