FPIs withdraw ₹23,710cr from Indian equities in February
What's the story
Foreign Portfolio Investors (FPIs) have pulled out a whopping ₹23,710 crore from Indian equities in February 2025. The latest withdrawal comes on the heels of a net outflow of ₹78,027 crore in January, taking this year's outflows to over ₹1 lakh crore. The figures were released by depositories and reflect the trend of foreign investors trimming their stake in India's equity market.
Market impact
Nifty yields negative returns
The massive pullout by FPIs has resulted in the Nifty giving negative returns of 4% year-to-date. The development comes amid reports that US President Donald Trump is considering new tariffs on steel and aluminum imports. The possibility of reciprocal tariffs on a few countries has also been hinted at, triggering more market fears.
Investor sentiment
Global trade war fears prompt FPIs to reassess emerging markets
The prospect of a global trade war has prompted FPIs to reevaluate their exposure to emerging markets, including India, according to Himanshu Srivastava, Associate Director-Manager Research at Morningstar Investment Research India. He added that lackluster corporate earnings and continued depreciation of the Indian Rupee have further reduced the attractiveness of Indian assets for foreign investors.
Debt withdrawal
FPIs also withdraw from Indian debt market
Along with equities, FPIs have also withdrawn funds from the Indian debt market. They pulled out ₹7,352 crore from the debt general limit and ₹3,822 crore via the debt voluntary retention route.