According to the Congressional report, the foreign investors turning net merchants in the March quarter and pulling out $6.4 billion from the Indian market due to the Coronavirus Pandemic.

Congressional Research Center stated in their report, “Foreign investors have pulled an estimated $26 billion out of developing Asian economies and more than $16 Billion out of an India, increasing concerns of a major economic recession in Aisa.” 

As per a report in Morningstar, the foreign investors were on a selling spree in March as they sold net resources worth $8.4 billion.

On the other hand, more than 30 million individuals from European countries like in Germany, France, the U.K., Spain, and Italy have applied for state support.  While the first quarter of 2020 information shows that the eurozone economy shrunk by 3.8 percent, the biggest quarterly decay since the arrangement began in 1995, it said. 

U.S., preliminary information demonstrated that the GDP fell by 4.8 percent in the primary quarter of 2020, the biggest quart

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Covid-19 Impact on Indian Economy

“The uncertainty over the gravity of the pandemic’s impact on the global economy and financial markets worldwide triggered a flight to safety among foreign investors as they rushed to exit from relatively riskier investment destinations, such as emerging markets like India,” – PTI 

As of the quarter finished March 2020, the estimation of FPI interests in Indian values remained at $281 billion, which is impressively lower than the $432 billion, recorded in the December quarter. This is the most minimal in the previous six years, with the past low being $238 billion toward the finish of March 2014, the report said. 

Therefore, FPIs’ commitment to Indian value showcase capitalization additionally tumbled to 18.7 percent from 19.8 percent in the past quarter. 

Having sensed the COVID-19 impact, the foreign investors kept on escaping the Indian value space even in the period of April, however, the measure of net outpourings dropped significantly contrasted with the previous month. They sold net resources worth $904 million as the month progressed.