International Journal For Multidisciplinary Research

E-ISSN: 2582-2160     Impact Factor: 9.24

A Widely Indexed Open Access Peer Reviewed Multidisciplinary Bi-monthly Scholarly International Journal

Call for Paper Volume 8, Issue 2 (March-April 2026) Submit your research before last 3 days of April to publish your research paper in the issue of March-April.

Rejuvinating the Indian Capital Market

Author(s) Mr. Prasad R
Country India
Abstract In 2025, foreign portfolio investors withdrew nearly USD 17 billion from Indian equities, and the country also faced high U.S. tariffs on its exports. Despite these setbacks, Indian retail investors became key buyers through systematic investment plans (SIPs) and direct stock purchases, helping to cushion the impact of FPI outflows. Monthly SIP contributions reached record highs, showing growing trust in equity mutual funds for long-term financial growth. In response, SEBI, the securities market regulator, introduced reforms to attract foreign investors and revitalize the capital market. To find effective strategies for this effort and boost capital formation, the researcher consulted both experts and traders. Their feedback suggests that SEBI should launch new products such as sectoral, thematic, volatility-based, and ESG-linked derivatives, and also revive less-used asset classes like currency and interest rate derivatives. Building a strong securities lending and borrowing (SLB) system is also recommended. SEBI should reduce the number of contract expiries and increase lot sizes to make futures and options (F&O) trading more expensive for individuals. This is important because short-term derivatives, unlike long-term ones, do little to support capital formation and can increase market volatility. Finally, allowing netting across different stocks would let investors, especially foreign ones, offset buy and sell trades and lower the capital needed for trading.
Keywords cushion; rejuvenate; robust; sectoral; stakeholder; tariff; thematic
Field Sociology > Banking / Finance
Published In Volume 8, Issue 2, March-April 2026
Published On 2026-04-03
DOI https://doi.org/10.36948/ijfmr.2026.v08i02.73353

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