India-focused offshore equity funds and exchange traded funds (ETFs) witnessed net investment of $2.6 billion during April-June of 2017, the highest inflow in more than two years.
In comparison, the funds saw an infusion of $2 billion in the January-March quarter.
The offshore India fund -- not domiciled in India -- receives flows from overseas investors and in turn invests the money into the Indian markets, according to a report by Morningstar.
“Growing geopolitical concerns on the back of US bombings in Syria and Afghanistan and aggressive stance towards North Korea injected an element of uncertainty in the initial part of the quarter, which prompted foreign portfolio investors (FPIs) to hedge risks.
“Given emerging markets are more susceptible to such uncertainties, they restrained their investments into Indian markets. As a result, FPIs were net buyers of Indian equities worth $0.37 billion in April,” said Himanshu Srivastava.