FPI funds with India-specific mandates gain traction

Money Matters

- NESIL STANEY

AT A TIME when foreign portfolio investors (FPIs) are cutting exposure to Indian equities because of tariff turmoil, elevated valuations and muted corporate earnings, India-focused exchange traded funds (ETFs) and active funds are increasing investments.

According to experts, demographic dividends, growth, reforms, domestic consumption, digital adoption and China's declining weight in global portfolios are attracting these entities.

These funds allocate 100% of flows into India and are inherently more stable compared with mandates like Asia (ex-Japan), BRICS and EM ETFs that invest in multiple markets.

"The uniqueness of Indian market, its stability and depth are driving more dedicated mandates," said Nikunj Doshi, managing partner of Bay Capital, which operates an FPI fund.