Foreign capital, corporate bond market key priorities for DEA: Alok Tiwari

The government is prioritizing the attraction of foreign capital and the development of India's corporate bond market, according to Joint Secretary Alok Tiwari of the Department of Economic Affairs (DEA). Speaking at the FICCI Capital Markets conference in Mumbai, Tiwari noted that while foreign capital had begun to flow again in July, there are still some obstacles.

He emphasized the need for both domestic and foreign capital to support India's growth and financial development, stating that "foreign capital has to be welcomed" and that "foreign capital has to be attracted."

Tiwari revealed that there is a "broad consensus" among government officials, regulators, and market participants regarding the importance of attracting foreign capital, and that efforts to facilitate foreign investment by streamlining the regulatory framework are ongoing. The government is currently revising the Foreign Exchange Management (FEM) and Foreign Investment (EI) rules, which are open to public consultation by the Reserve Bank of India.

The aim is to make these rules more principle-based, easier to follow, and straightforward to navigate.

Additionally, Tiwari highlighted the need to improve the corporate bond market's depth, liquidity, and participation in the secondary market. He acknowledged that the current market lacks the required depth, liquidity, and secondary-market participation, stating that addressing these issues is one of the DEA's priorities. Tiwari also mentioned the proposed Securities Markets Code as a significant piece of forward-thinking legislation, which seeks to create a new regulatory framework.

This includes decriminalizing minor infractions, enhancing investor protection, and strengthening regulatory accountability.