The Indian government is also likely to bring in curbs on foreign flows over the next few months. The country has seen a sharp appreciation in the local currency, the Indian Rupee, over the last three months. The Rupee has appreciated over 8% in the last quarter which is making the exports non-competitive.
The Indian economy employs over 10% of the work force in small and medium scale sector focused on exports to US and Europe and Japan. And curbing of cheap foreign fund flow is the only way for the Indian government to cut down on the rupee appreciation. Many other countries including Brazil and South Korea have brought in additional curbs on foreign fund flow already.