Although foreign fund flows into the Indian equity markets have been at their lowest levels in the past four years, the country is still better placed as compared to other countries in terms of overseas investments in domestic stock markets.

Witnessing inflows of just $4.32 billion, India still stood at seventh position among countries that saw the highest inflows into their respective equity markets, according to Bloomberg.

Among Asian and emerging markets (EMs), India is the third country to receive largest foreign inflows after Brazil and Taiwan. The country accounted for 33.2% of overall foreign flows into Asia and EMs.

Experts said that the Indian market, with its strong macroeconomic fundamentals and scope for higher growth, continues to remain as the "favoured destination for foreign funds".

"Investor sentiment about Indian markets is improving as the government is pushing reforms like GST (goods and services tax), allowing FDI (foreign direct investment) into more sectors of economy and the new bankruptcy code. Earnings are also on the verge of improvement. If you see the corporate earnings during Q2FY16, the operating margins of majority of the companies have improved," The Financial Express quoted Andrew Holland, CEO at Ambit Investment Advisors, as saying.

A recent analysis by Business Standard showed that the adjusted net profit of Indian companies went up by 7.7% in the July-September quarter, posting the fastest growth in the last four quarters.

Earlier this week, the Modi government announced easing of FDI norms for 15 sectors, indicating that it remains committed to initiate much needed reforms to revive the economy.

The government had cleared 16 foreign investment proposals worth Rs 4,722 crore last month, which could further strengthen India's position as the top FDI destination globally.