FPIs pull out ₹18,000cr from Indian equities this month
What's the story
Foreign Portfolio Investors (FPIs) have pulled out nearly ₹18,000 crore from Indian equities this month. The withdrawal is largely attributed to rising US-India trade tensions, disappointing corporate earnings for the first quarter, and a weakening Indian rupee. The total outflow by FPIs in equities has now reached ₹1.13 lakh crore so far in 2025, data from depositories showed.
Investor behavior
FPI sentiment expected to remain 'fragile'
The data also revealed that FPIs withdrew a net sum of ₹17,924 crore from equities this month till August 8. In July, foreign investors had pulled out a net amount of ₹17,741 crore. Prior to that period from March to June, FPIs had invested ₹38,673 crore. Going forward, FPI sentiment is expected to remain "fragile and in risk-off mode," with tariffs and trade negotiations emerging as key factors in the coming week.
Market response
US-India trade tensions impacting foreign investments
On August 1, US imposed 25% tariff on Indian goods and increased these tariffs by another 25% this week. This move spooked markets and FPIs, resulting in a major sell-off in Indian equities. Rising US Treasury yields also contributed to foreign money moving toward treasuries.
Debt investment
Some FPIs still investing in India's debt market
Despite the outflows from equities, FPIs invested ₹3,432 crore in the debt general limit and ₹58 crore via the debt voluntary retention route during this period. This shows that while foreign investors are pulling out of Indian stocks amid trade tensions and corporate earnings disappointment, some are still investing in India's debt market.