A combination of global and domestic factors led to foreign investors pulling out investments from Indian equities in November after a brief pause in October.
Foreign portfolio investors (FPIs) withdrew a net ₹3,765 crore in November, driven mostly by global risk-off sentiment surrounding uncertainty around the US Federal Reserve’s rate-cut trajectory, volatility in global tech stocks and selective preference for primary markets over secondary markets.
This dip in November came right after a net inflow of ₹14,610 crore in October, an uptick that had broken a three-month streak of withdrawals – ₹23,885 crore in September, ₹34,990 crore in August, and ₹17,700 crore in July, according to depository data.
So far in 2025, FPIs have withdrawn over ₹1.43 lakh crore from Indian equities. Meanwhile, in the debt market, FPIs invested ₹8,114 crore under the general limit while withdrawing ₹5,053 crore through the voluntary retention route during the same period.
Himanshu Srivastava, Principal, Manager Research, Morningstar Investment Research India, attributes weak risk appetite across emerging markets to have kept foreign investors cautious. “Persistent geopolitical tensions and volatile crude prices further reinforced the risk-off tone”, he said.
“Domestically, this cautiousness was compounded by pockets of stretched valuations and subdued industrial indicators, which tempered investor conviction despite India’s relatively stable macroeconomic backdrop”, he added.
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Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, agrees, noting that the outflows in November were primarily driven by global risk aversion and volatility in tech stocks.
While IT services, consumer services, and healthcare were among the sectors that faced the sharpest impact, not all indicators point toward a sustained bearish trend.
V K Vijayakumar, Chief Investment Strategist at Geojit Investments, believes there is still no clear evidence of a trend reversal in FPI flows, with FPIs being buyers on some days and sellers on others.
“The recent rally, with both Nifty and Sensex hitting new records on November 27 after a fourteen-month wait, along with improved Q2 corporate earnings and expectations of further growth in Q3 and Q4, has lifted market sentiment,” he added.
Looking ahead, Angel One’s Khan said that FPI activity in December will likely depend on the US Federal Reserve’s rate-cut signals, RBI’s rate cut decision, and progress on the trade pact between India and the US.
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