“During the pandemic, there is a very significant increase in retail investor numbers in India. If FPIs are going away and giving us the feeling that funds are going out of India, retail investors have come in a big way, they seem to act like shock absorbers. If FPIs went away, our market did not really have to go through ups and downs in a very distinct way, because the small investors have come in, in a big way, trickling into the country,” the FM said at an event organised by the ministry of corporate affairs.
In recent years, retail investors have flocked to the stock markets, either directly, which is reflected in the rise in the number of demat accounts, or via systematic investment plans (SIPs) run by mutual funds or unit-linked insurance plans (ULIPs).
Indian stock markets have remained choppy, given the global uncertainty as well as the inflation situation domestically. Sitharaman further added that regulators need to be ahead of the curve in dealing with challenges.