The concern for regulation should be about the several unanswered ‘hows’ that go with the increased interest in India, its economy, its markets and its stocks. How can this interest enable the creation of global sized companies with practices that match the best in the world? How can this interest be harnessed to create global-sized banks that can deal with the flows it brings?

The first surge of FII interest in the 1990s pushed policy towards demat and derivatives. The next surge should take the markets to the next level, and those with the agenda to develop the economy need to figure that out. Smaller markets like Israel, trouble-ridden markets like Chile, and control-freak markets like Taiwan have had road maps. It would be a shame if India chose to bring back controls instead.

The writer is managing director, Centre for Investment Education and Learning