Integration of financial markets in India : An Empirical analysis

Abstract

During the last decade, significant progress was achieved in terms of policy and institutional reforms in the financial sector in India. A question that needs to be addressed is: how far have these initiatives resulted in narrowing the inter-market divergences and achieved reasonable degree of the market integration? This paper examines this issue empirically and attempts to provide some evidence on the market integration in India. It found that while the reform process has helped removing institutional bottlenecks to the free flow of capital across various segments of the financial market; this has not yet been translated into complete integration among them.