Amid rising global trade tensions and weak corporate performance, foreign investors withdrew funds from the Indian equity market, taking out Rs 24,753 crore (about USD 2.8 billion) in the first week of March. This occurred after equities saw withdrawals of Rs 78,027 crore in January and Rs 34,574 crore in February.
Data from the depositories indicated that the overall outflow by FPIs in 2025 has reached Rs 1.37 lakh crore. Foreign Portfolio Investors (FPIs) sold shares worth Rs 24,753 crore from Indian stocks last month (until March 7), according to data with the depositories.
Additionally, net outflows have occurred for 13 weeks in a row. The total amount of equity shares that FPIs have sold since December 13, 2024, is USD 17.1 billion. The rupee’s decline has made this uncertainty worse and made Indian assets less attractive.
This has helped to fuel a spectacular surge in Chinese stocks, as the Hang Seng Index has returned 23.48 percent so far this year, while India’s Nifty has returned a negative 5 percent. As uncertainty increases, investors are shifting their focus from externally linked sectors to domestic consumption-driven industries, including financials, telecom, hotels, and aviation.
They withdrew Rs 377 crore from the debt voluntary retention route and put Rs 2,405 crore in the debt general limit. In 2024, foreign investors dramatically reduced their investments in Indian shares, with net inflows of only Rs 427 crore, indicating a cautious posture generally.
This is in stark contrast to the remarkable net inflows of Rs 1.71 lakh crore in 2023, which were propelled by hope for India’s solid economic foundation. In contrast, significant rate hikes by international central banks in 2022 resulted in a net outflow of Rs 1.21 lakh billion.
