Foreign Portfolio Investors (FPIs) withdrew ₹34,993 crore (approx. $4 billion) from Indian equity markets in August—the sharpest monthly sell-off in six months. This nearly doubles the ₹17,741 crore outflow seen in July.
- Primary Market Still Attractive
Despite equity withdrawals, FPIs have contributed over ₹40,000 crore in IPO investments in 2025, signaling ongoing appetite for reasonably valued listings. - Steady Domestic Cushioning
India’s market stability amid FPI exit reflects strong domestic institutional investor (DII) inflows, robust retail participation, and favorable macroeconomic fundamentals
The bulk of recent FPI selling was concentrated in the Financial Services and IT sectors, affected by tariff concerns, rupee depreciation, and weak Q1 earnings. - Rupee Pressure Evident
The FPI exodus has contributed to rupee depreciation. However, the Reserve Bank of India (RBI) has stepped in to cap the losses near the ₹87.80–88.00/USD range.
Context & Market Resilience
Foreign investor sentiment has dimmed this year, with over ₹1.3 lakh crore withdrawn in equities in 2025 alone. Yet, India’s market hasn’t faltered—buoyed by the actions of local investors and policy stability.
Sector-wise, IT and FMCG segments saw the sharpest hits, while Telecom and Services held up better—indicating that global capital is becoming more selective rather than fully retreating.
Despite rising challenges from US tariffs and global volatility, domestic investor confidence remains robust—highlighting India’s evolving market maturity.
