Foreign investors pull $1.8 billion from India-focused funds in month
In the last four weeks (ending August 20, 2024), foreign investors have pulled $1.8 billion out of India-focused funds—the biggest exit since January, according to Elara Capital.
Compared to other major Asian markets, India saw the weakest inflows during this time.
Reasons for the outflow
Between March and September 2024, money was pouring into India while China was losing out.
But since October [2024], things flipped—India started seeing outflows and China/Hong Kong got fresh investments.
The reasons? Rising US-India trade tensions (like a new 25% tariff in August), weaker company earnings, and a sliding rupee have made global investors rethink their bets on India.
Impact on Indian stocks
Most of the recent withdrawals came from big exchange-traded funds and active fund managers like Wisdom Tree and Invesco.
This extra supply could put pressure on top Indian stocks for a while.
Meanwhile, US investment flows are staying pretty flat as global bond funds slow down too.