Arab investors keen on pie in Indian market post-liberal rules

India's decision to allow foreign individuals or groups to invest directly into the country's stock market has attracted serious investment enquiries from the Arab world.

In a letter to Finance Minister Pranab Mukherjee, a Sharjah-based real estate magnate has hailed the decision stating: "A large number of UAE-based family offices that have business relationships with Indian counterparts will be the first movers to participate and propagate this initiative".

However, he has asked for clarifications on whether individuals, groups or associations based in the member countries of the Gulf Cooperation Council (GCC) will be eligible to participate in the Indian stock market.

The question is raised because the January 1 decision of the Indian Finance Ministry sets two conditions for allowing overseas investors to put their money into the country's stock exchanges.

As per the riders, the investors have to be from countries which are FATF (Financial Action Task Force) compliant and are signatories to the IOSCO (International Organisations of Securities Commissions).

FATF promotes international policies to combat money laundering and terrorist financing activities.

While the GCC is a full member of FATF, the individual member countries -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE are not.

Besides, from the GCC countries, only Bahrain and Dubai Financial Services Authority are members of the IOSCO.

The investors from the Arab world want the government to ensure that the two conditions do not come in their way to put their money in Indian bourses.

With the crisis in European markets, investors from the Arab world are showing increased interest in India.