FII outflows from India touch record high: What's next?
What's the story
Foreign Institutional Investors (FIIs) are set to end 2025 with the largest-ever exit from Indian equities. The steepest net outflows in India's capital markets history are driven by exchange selling, rupee weakness, and inferred global capital shifts. As of today, FIIs have sold equities worth ₹22,130 crore through exchanges. This takes the total equity selling in calendar year 2025 to ₹2,31,990 crore.
Outflow details
Net FII outflow reaches ₹1.58L crore
Investments through the primary market stood at ₹73,583 crore, bringing the net FII outflow figure to a staggering ₹1.58 lakh crore. This is the worst annual net selling by FIIs since they began investing in India. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, emphasized that "as 2025 comes to an end, FII selling in India is set to hit a new high."
Market imbalance
2025 sees sharp divergence in FII activity
Vijayakumar noted that while FII activity was balanced last year, with primary market investments offsetting exchange-based selling, this year has seen a sharp divergence. He explained that in 2024 FIIs sold equity worth ₹1.21 lakh crore through exchanges but invested ₹1,21,637 crore through the primary market. However, for 2025, the net sales figure is a massive ₹1.58 lakh crore due to intensified selling pressure from exchange selling and rupee weakness.
Currency impact
Sustained selling has contributed to INR depreciation
Vijayakumar attributed the intense selling pressure to the weakening of the Indian rupee. He said, "The sustained selling by FIIs has contributed significantly to the sharp depreciation in INR this year." However, he added that prospects for a turnaround are beginning to emerge with improvements in fundamentals likely attracting net FII inflows in 2026.