According to sources, the decision was taken after hectic negotiations between MSCI and the Indian government.
MSCI has deferred its decision to exclude Global Depository Receipts (GDRs) and American Depository Receipts (ADRs) while calculating foreign ownership limits (FOL), according to a report in The Economic Times.
The move could have led to outflows of over $1 billion outflow of overseas funds from India.
Sources told the paper that the decision was taken after hectic negotiations between MSCI and the Indian government.
Moneycontrol could not independently verify the news.
MSCI will re-evaluate the situation before November 2019 after closely tracking developments related to FOL and accessibility of ADRs, sources told the paper.
This is the second time in the recent past where the MSCI has put on hold a decision that could hurt foreign flows to India.
The MSCI earlier this year said it will postpone a decision to cap India's weight on the MSCI-Emerging Market Index.
"MSCI will closely monitor the developments related to accessibility of DRs, as well as other enhancements related to FOL in India and will re-assess the situation prior to the November 2019 SAIR," the global index provider said in a statement on March 29.Led by Principal Economic Adviser Sanjeev Sanyal, a group of officials had held discussion on the ideal MSCI weights after several fund managers and domestic investors demanded corrective measures, the report said.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.