Foreign portfolio investors have gone slow on investment in India due to high valuation but any correction is likely to be short-lived, says Brian Jacobsen , Senior Investment Strategist on the Multi Asset Solutions team with Wells Fargo Asset Management .
Excerpts from an e-mail interview :
Why have foreign investors been going slow on flows into India in recent times?
Two things have conspired to slow foreign portfolio investment into India. The first is simply that India's equity market is up over 24% year-to-date. It's possible, investors are waiting for a pullback. The second factor is that it was unclear how big and long, the effect of the goods and services tax (GST) would be. India has had a slowdown due to last year's demonetization programme and just recently due to the transition to GST. While these changes may be positive in the long-term, in the near-term, there has been some pain.
