Linkage Between Indian Stock Markets and Foreign Investors

There is a great deal of dependency between the Indian stock market and foreign institutional investors (FIIs). Due to the fact that their investment choices frequently impact market performance, FIIs have emerged as key players in determining market trends. By using the Augmented Dickey-Fuller (ADF) test, the Vector Auto Regression (VAR), Johansen’s Co-Integration Test, and the Granger Causality Test. Investors and exchange rates in India need to understand the relationship between the exchange rate of India and foreign investor participation to make investment decisions and gain insights into portfolio diversification techniques.