As global trade tensions rose steadily in 2025, engulfing almost all the countries, jittery investors pulled out investments to the tune of ₹1.38 lakh crore from Indian equities.
According to depository data, foreign investors have pulled out ₹7,945 crore in September alone, when hiked tariffs imposed by the US on Indian imports took effect.
The month of August saw heavy outflows of ₹34,990 crore, while July witnessed ₹17,700 crore being withdrawn.
Looking ahead, market experts believe that upcoming macroeconomic data from India and the US, along with progress in tariff negotiations, will be key drivers of Foreign Portfolio Investors (FPI) flows in the coming week.
The silver lining is that although FPIs remain net sellers in September, with cumulative equity outflows of ₹7,945 crore till September 19, their selling has moderated. In fact, during the latest week, they briefly turned net buyers, purchasing ₹900 crore of equities after the US Federal Reserve cut interest rates by 25 basis points.
Also Read: Biggest FPIs' sell-out in 6 months, ₹35,000-cr pulled out in Aug
"For the current week FPIs bought Indian equities worth ₹900 crore on the back of the Fed's rate cut. With two more cuts projected in 2025, liquidity in global markets could improve significantly. However, FPIs remain net sellers in September," said Vaqarjaved Khan, Senior Fundamental Analyst, Angel One Ltd.
Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, too agreed that foreign investors made a "modest but noticeable return" to Indian equities during the week.
He said the Fed's dovish stance, coupled with easing US-India trade frictions and India's stable macroeconomic outlook, has lifted sentiment.
However, lingering global uncertainties and geopolitical risks continue to keep flows cautious.
Echoing this view, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, pointed out that FII selling in India has coincided with buying in other Asian markets such as Hong Kong, Taiwan, and South Korea – a strategy that has been profitable so far this year. "This scenario may change going forward," he added.
On the other hand, debt markets witnessed investment, FPIs invested about ₹900 crore under the general limit and ₹1,100 crore through the voluntary retention route.
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