Indian financial markets have come a long way since the adoption of New Industrial Policy framework by Indian government in 1991. There is an increasing trend towards the internationalization of Indian financial markets, driven mainly by the Indian government willingness to adopt liberalized and outward looking policy initiatives with regard to its financial markets. Companies outside India can raise capital from the Indian capital market with the issuance of Indian Depository Receipts (IDRs). This paper aims at understanding the conceptual framework of IDR programmes and studying the evolution of IDR markets. The paper examines the structure and status of IDRs along with the simplified listing norms given by SEBI. The paper has identified that legal implications, Exchange control issues and tax aspects; the factors responsible for the slow growth of depository receipts in India, which still needs to be crystallized. The paper recommends certain steps which can help to activate the IDR market and to become an important source of finance which can be used by the foreign firms for cross listing India.
Indian Depository Receipts, SEBI, Globalization
