Foreign portfolio investors (FPIs) have pulled out a significant ₹31,575 crore from Indian equity markets in April, mainly due to rising uncertainty over sweeping tariffs imposed by the United States on multiple countries, including India.
This development marks a sharp reversal from the final days of March, during which FPIs had infused ₹30,927 crore in just six trading sessions between March 21 and March 28.
Although the late-March inflows helped trim the net outflow for that month to ₹3,973 crore, April has begun on a cautious note. Between April 1 and April 11, foreign investors have steadily withdrawn their investments, reflecting growing apprehension over global economic tensions.
The data, sourced from depository records, paints a picture of nervous markets amid shifting trade policies and geopolitical unease.
When viewed against previous months, the April figures show a mixed trend. In February, FPIs had withdrawn ₹34,574 crore from Indian equities, while January saw a much steeper outflow of ₹78,027 crore.
These fluctuations underscore the volatility in investor behaviour and highlight the broader shifts taking place across global financial markets.
Experts believe the current outflows are largely being influenced by the escalating trade friction triggered by US President Donald Trump's imposition of reciprocal tariffs. The resulting uncertainty is leading global investors to adopt a wait-and-watch approach, particularly in emerging markets like India.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that the global turbulence following the tariffs is clearly influencing FPI behaviour.
He suggested that a more defined investment pattern may only emerge once the market settles. Looking ahead, he expressed optimism about India’s prospects.
"In the medium term, FPIs are likely to return to Indian markets. As both the US and China show signs of slowing down due to the ongoing trade war, India could remain a relatively bright spot. With GDP growth expected to touch 6 per cent in FY26 and earnings projections looking strong, India could become an attractive destination for foreign investors again," Vijayakumar said.
Echoing a similar sentiment, Vinit Bolinjkar, Head of Research at Ventura Securities, attributed the sell-off to geopolitical risks and macroeconomic pressure stemming from the US tariff decisions. However, he emphasised that India’s long-term outlook remains positive.
"Despite the current outflows, India’s strong macroeconomic fundamentals, driven by domestic demand and shifting global trade dynamics, provide a solid foundation. These factors will continue to support India’s position in global investment portfolios," Bolinjkar said.
The pullback wasn’t limited to equities alone. FPIs also withdrew ₹4,077 crore from the debt general category and another ₹6,633 crore from the voluntary retention route. These figures reflect broader caution among investors across asset classes.
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