Foreign Investors Pull Out Rs 21,000 Crore from Indian Markets

Foreign portfolio investors (FPIs) have significantly reduced their equity holdings in India, offloading approximately Rs 21,000 crore in the first half of August 2025. This move is largely attributed to ongoing US-India trade disputes, underwhelming Q1 corporate earnings, and the depreciation of the Indian rupee.

Understanding the FPI Exodus

The total FPI equity outflows for 2025 have reached a staggering Rs 1.16 lakh crore, with Rs 20,975 crore withdrawn by August 14 alone. This trend follows a Rs 17,741 crore pullout in July, marking a sharp reversal from the Rs 38,673 crore invested between March and June.

Global Uncertainties and Market Sentiments

Analysts point to a combination of global uncertainties, including geopolitical tensions and unpredictable interest rate trajectories in developed economies, as key factors driving the risk-averse behavior among investors.

A Glimmer of Hope

Despite the current challenges, the potential delay in implementing proposed US tariffs on India and S&P's upgrade of India's credit rating offer some optimism for future FPI inflows.