Mauritius No Longer Top Foreign Institutional Investor Provider to India

America’s ascension to the top spot means that India’s top FII source, Mauritius, has been knocked down to number two. The information comes from the Securities and Exchange Board of India (SEBI), who also said that the half of the $10 billion already invested in India this year has come from FIIs into the Indian equity markets, while the other half has gone into the country’s debt markets.

The cumulative total of FIIs into the country is expected to hit $200 billion shortly; over the last 22 years, since FIIs first opened in 1992, India has seen $167 invested in its equities market and $30 billion in its debt markets, for a total of $197 billion. This will certainly be passed in 2014, and possibly even within the next couple of months.

March along saw foreign investors put over $3 billion into India, a huge increase from January and February, which only saw about $354 million combined. Foreign investments overall have positively influenced India’s stock index, the BSE Sensex, which has seen a 7% growth so far in 2014. Both of India’s major stock indices, the BSE Sense and the NSE Nifty, have seen record highs this year.

The Press Trust of India reports that the main reason for such an increase in FII is because foreign investors are looking at India’s likely government change as a sign of new times. Investors looking at India from the outside are expecting that, after the dust settles on the ongoing elections, India will have a more stable government that should make economic growth even more robust.

However, some analysts say that FII flows into India will likely taper off for a bit, until the elections are done. In an interview with CNBC, Quant Capital equity strategist Rishav Dev says that an election of this magnitude will cause inflow to plateau temporarily, but these numbers may pick up again afterwards.

“In the context of a big event I do not see inflows picking up in next couple of weeks and overall we will see negative to flat kind of inflows in next couple of weeks because before an event it would be very difficult for any [FIIs] to take a call,” Dev told CNBC. “I think they will remain at the sidelines for the next couple of weeks.”