A thread on cumulative FII inflows into India in the CY2020

Background  : This was a widely shared link on social media and also tweeted by FM @nsitharaman amid a lot of discussion around the strong foreign inflows in Indian

India received ~1.6 lakh crore in FII flows last calendar year when most Asian and emerging markets witnessed outflows. This is encouraging stuff one would say. However, this is not the complete story.

The total flows in Secondary markets (Debt + Equity but not including FDI deals in primary markets) are marginally positive. It means as yields collapsed, FIIs switched from Indian debt to Indian equities.

In fact, last 6 CYs (2015-2020) net flow in debt & equity is negligible.

Now one may ask what suddenly changed in 2020. Well, Central banks kept the tap open. That's easy answer.

But still the flows became aggressive only in last two months of 2020 - Nov & Dec

Why in last two months?

Two technical things happened:

(a) MSCI Annual review on Nov 10 brought fresh inflows. This happens every year, so was not