New Delhi, Feb. 10 -- Foreign investment in Indian equities got off to a good start in February. By Friday, more than Rs.8,100 crore worth of Indian shares had been bought by foreign portfolio investors. This follows their liquidation of over Rs.62,000 crore worth of stocks in the previous three months.

Though these are still early days, the purchases seem consonant with a wave of economic optimism over an India-US trade deal in the works. Does this mark a turning point for foreign inflows? A cloud of gloom has lifted.

Earlier, as foreign investors exited, the rupee had slid, reducing the appeal of Indian assets. For this dynamic to durably reverse, India needs an insurge of foreign direct investments too. Perhaps New Delhi's deal promi...