NEW DELHI: Foreign portfolio investment (FPI) in India this fiscal has seen steady growth in debt investment in sharp contrast to the volatile equity investment, V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said on Saturday.

This rising trend in debt investment is evident in March too, with inflows of Rs 13,223 crore in debt through March 2022, he said.

The fundamental reason for this sustained FPI flows into debt is the inclusion of Indian bonds in the JP Morgan EM Bond Fund and the Bloomberg Bond Index, which is expected to bring investment of around $25 billion.

This investment will begin only by June 2024 and, therefore, FPIs are doing some front-running given this potential investment, Vijayakumar added.

FPI inflows into debt are likely to continue going forward. However, a sharp surge in debt flows is unlikely since the US bond yields have also risen in recent days, and if the differential between developed market bond yields, particularly US bonds, and Indian bond yields decline, the debt inflows will moderate, he added.