According to statistics reported by the National Securities Depository Limited, in the first two months of 2025, foreign portfolio investors took out more than Rs 1 lakh crore worth of stocks from Indian markets. The Rs 1,01,737 crore in total FPI outflows so far this year indicate a substantial capital flight from the nation’s stock market.
FPIs made stock sales last week totaling Rs 2,437.04 crore. This indicates a decrease in the volume of sales in contrast to the previous week when foreign investors sold off stocks valued at Rs 13,930.48 crore. Bulk transaction investments in Bharti Airtel shares have been credited with relieving some of the selling pressure and easing market conditions.
FPIs sold stocks valued at Rs 23,710 crore in February alone. This comes after foreign investors withdrew Rs 78,027 crore during a steep selling frenzy in January. On the other hand, December 2024 concluded with a net FPI investment of Rs 15,446 crore, which was a favorable outcome. FPI net buying value in Indian stocks had already drastically decreased, falling to just Rs 427 crore, despite a robust close to 2024.
Experts in the market point to some causes for the ongoing selling pressure. Investor caution has been exacerbated by geopolitical tensions, rising US bond yields, and global uncertainties. The resurgence of Donald Trump’s political power in the US is a significant factor deterring investment from developing nations like India. Investor confidence in the US economy has increased as a result of his comeback to the political arena, making it a more desirable place to invest.
India and other emerging markets have seen large withdrawals of foreign investors as they turn to safer assets. In 2024, FPI inflows to India fell precipitously, with net investments declining by 99% from the year before. Analysts caution that the FPI withdrawals might keep having an impact on the Indian stock market unless the state of the world economy stabilizes.
