‘Kashmir and strife hurdles in investment’

A number of large foreign funds managing trillions of dollars of investor assets globally have flagged “persisting religious conflicts” and “Kashmir dispute” as potential risks to their investments in India, saying such “tensions” could destabilise the Indian economy.

JPMorgan, one of the largest wealth managers in the world with asset under management of over $1.7 trillion, alone has flagged these “religious and border disputes” regarding investments in India in at least eight regulatory filings made by its various funds so far.

Besides, a number of other funds, including the India Fund managed by Aberdeen Asset Management, which has more than $380 billion of assets under management, have listed similar “risks” in their regulatory filings made with the US Securities and Exchange Commission (SEC).

Other such funds include Eaton Vance Greater India Fund, Mathews International Funds, Alps Funds (Financial Investors Trust), Franklin Templeton International Trust, Global X Funds and iShares Trust (managed by BlackRock Fund Advisors). Besides, Wasatch Funds Trust, Arthur J Gallagher & Co and Causeway Capital Management Trust have also flagged similar concerns.

When contacted, senior officials at some of these funds and other experts said such risk factors follow a generic pattern in regulatory filings by various companies and investors and not much should be read into them, but they admitted that religious conflicts and Kashmir dispute remain an overhang.

While cross-border tension continues in the Kashmir region, the government has been trying to send across a positive message to the world and some saw hosting of the GST Council meeting in Srinagar last week as a step in that direction.

In a filing made by JPMorgan Trust II on May 18, the fund said, “Religious and border disputes persist in India. Moreover, India has from time to time experienced civil unrest and hostilities with neighbouring countries such as Pakistan.”

IT major Cognizant, which has a substantial portion of its assets and operations in India, said in one of its SEC filings that the potential for hostilities between India and Pakistan “has been high in light of tensions related to recent terrorist incidents in India and the unsettled nature of the regional geopolitical environment, including events in and related to Afghanistan, Iraq and Syria”.