India to attract foreign capital, deepen corporate bond market: DEA

He said there is a “broad consensus” among the government, regulators and market participants on the need to bring in foreign capital, and called it “a work in progress”.

The government is also recasting the Foreign Exchange Management Act and Foreign Investment rules. “FEM and EI (Foreign Exchange Management, Foreign Investment) rules are being recast. They are open to public consultation right now by the Reserve Bank of India,” Tiwari said. “We hope to make it more principle based, easier to follow and easier to navigate.”

On the corporate bond market, Tiwari said it lacks depth, liquidity and secondary-market participation. “The corporate bond market does not have the kind of depth, at least liquidity and participation in the secondary market which it should have. It is one of the priorities of the DEA.”

Tiwari also described the proposed Securities Markets Code as an “important piece of forward looking legislation” aimed at creating a new regulatory paradigm, including decriminalisation of minor infractions while strengthening investor protection and regulatory accountability.