"These indices are primarily based on the opinions of a tiny group of unknown 'experts'," the working paper said.
The central bank removed foreign investment caps for a number of securities under the 'fully accessible route' (FAR) in April 2020 to help meet a key requirement of index providers.
The United States' Nasdaq Composite is leading the world equity indices with gains of over 7% in just one month, followed by Hong Kong's Hang Seng (an up move of 6%) and India's BSE Sensex (an increase of 5%)
Among Asian markets, Shanghai Composite, KOSPI, Hang Seng lost over 1 percent, while among European markets, DAX shed more than 2 percent.
The National Stock Exchange is looking to launch derivative contracts linked to European indices, which will help domestic investors to have exposure to European equity market.