InvestorQ : What is the impact of the government plan to give Category-I status to Mauritius FIIs and would it improve the FPI fund flows into India?
Tisha Malhotra made post

What is the impact of the government plan to give Category-I status to Mauritius FIIs and would it improve the FPI fund flows into India?

Answer
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Moii Chavate answered.
5 months ago


Clearly, the government has been worried over the massive Rs.124,000 crore selling by FPIs in March2020. As a result, it looks like now the government has decided to make an all-out effort to entice FPIs to once again invest in India. It may be recollected that Mauritius was brought under the FATF watch list leading to a lot of leading FPIs in India worried about the sustainability of operations. Considering the dire situation in the markets and the recent sharp correction, the government has decided to open the gates for the Mauritius based FPIs to get Category 1 Licenses on a preferential basis. The FATF watch list would have disabled their Category 1 license. However, it is doubtful how much this move will impact the Indian markets because currently the FIIs are extremely risk-off and prefer the safety of developed markets. But, as a long term measure, this appears to be the right track.