This would expose institutional investors and their customers to international practices and ideas and increase the competition faced by Indian financial markets. It would also set the stage for Indian institutional investors to sell financial products overseas, the committee said.
While individuals in India are allowed to invest $2 lakh overseas per year, this is operationally difficult due to the restrictions that inhibit domestic and foreign financial firms from selling international financial products. These relaxations could help the country by allowing outflows that keep the exchange rate from appreciating, the report concluded.
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