The Bombay Stock Exchange has been falling drastically since the start of year 2008. The markets have slipped by  50% . The BSE Sensex closed at 10,169 on Tuesday after losing 513 points. Despite the situation, the Norwegian Sovereign Wealth Fund (SWF) has declared an investment of $2 billion (Rs 9,772 crore) in India, mainly in equities, over the next two months.

The Deputy Secretary General of the Norwegian Finance Ministry Thorvald Moe stated that India's weight age had been increased to 0.94% from the previous 0.2%. This welcome investment has come at a time when the Foreign Institutional Investors (FII) have taken away $11.2 billion from the Indian stocks since January.

The Norwegian SWF has assets of $350 billion making it the second largest in the world after Abu Dhabi Investment authority. The Norwegian SWF is constantly funded by the country's petroleum exports.

Mr. Moe after meeting with the officials at the Ministry of Finance, was positive that the Double taxation avoidance treaty which had been signed in 1986, when the economic scenario in India was different shall be updated .

He further added that the fund would invest only in those companies which met the required guideline of the Norwegian Parliament and did not engage in Child labour or in practices that are harmful to the environment.

The Vedanta Resources Plc (Vedanta) which is the major stock holder in Sterlite Industries, Madras Aluminum Company, Bharat Aluminum Company and Vedanta Alumina was denied funds on the recommendation of the Council on Ethics for the SWF on the ground that Vedanta was causing serious damage to people and the environment due to its various activities in India.

Maximum investment of the fund goes to US and the UK which are weighed at 30% and 15 % of the corpus respectively but Moe considers India and China with nearly 1% weightage as the leading emerging markets in the SWF's portfolio. To quote Moe there is "potential in India, though its financial markets still have to go a long way."