Key driver of offshore funds to India: The key driver is that the Modi administration is seen as getting a second term in 2019 and some more reforms can be expected. His hand was greatly strengthened by the outcome of the recent state elections where his party did so well. It does not hurt that a lot of the other standard matrix for India look pretty good -- from growth rate to declining inflation. I definitely think that the perception of the economic reform stories were the key driver of the flows.

Breakup of fund inflows: From our perspective based on mutual fund flows, India’s bond market has seen a lot of interest. For the better part of 14 months, flows into the India bond funds that we tracked last year hit record levels and they continued strongly into this year. Equity fund flows have been choppier but they have increasingly been positive since early February and a straight upward line is definitely positive.

What are the trends in EM debt and EM equity in terms of inflows and outflows? EM equities are starting to show the strain of the uncertainty about US economic policy and the possibility that the Fed is serious about being more aggressive about hiking rates. The most recent outflows were certainly the biggest year to date but even so, they were not that dramatic and the bulk of them were from three large country fund groups, Russia Country Funds, China Country Funds, and Korea Country Funds.

Emerging markets bond funds have been extremely resilient. Investors have learnt painfully that over-reactive is simply to kind of lose value and though the inflows are nowhere near as robust as they were last year at the high point, they still have been taking in a pretty steady average of close to a billion dollars a week this year.