In the midst of high US tariffs, depreciating rupee and an overall uncertain market scenario, foreign investors have pulled out ₹1.55 lakh crore (USD 17.7 billion) so far in 2025.
This total outflow includes ₹11,820 crore (USD 1.3 billion) withdrawn from Indian equities in the first week of December, primarily driven by the sharp depreciation of the rupee, and a net outflow of ₹3,765 crore in November.
While there was a brief pause in investment outflow in October, when FPIs poured in ₹14,610 crore, it was preceded by a three-month streak of massive withdrawals – including ₹23,885 crore taken out in September, ₹34,990 crore in August, and ₹17,700 crore in July, as per NSDL data.
The latest trend of renewed selling has been attributed by analysts to currency concerns, with the rupee having already depreciated nearly 5 per cent this year, triggering FPIs to pull out during volatile times, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
Vaqarjaved Khan, Senior Fundamental Analyst at Angel One, noted that year-end portfolio repositioning by global investors, a typical December trend before the holiday season, has also intensified selling, while delays and uncertainty surrounding the India-US trade deal are adding to further dampening of global sentiment.
While the FPI exodus led to decline in Indian stock indices, any major impact was prevented by strong domestic participation, since Domestic Institutional Investors (DIIs) bought equities worth ₹19,783 crore during the same period, thereby completely offsetting the foreign selloff.
Also Read: FPIs withdraw ₹3,765-cr from equities in November
DII confidence has been further supported by India’s robust GDP numbers and expectations of an improvement in corporate earnings ahead.
There was a huge boost to investor confidence after the RBI’s 25-bps rate cut on December 5, when FPI flows turned positive for the day at ₹642 crore. This was especially significant since FPIs had sold nearly ₹13,000 crore by December 4.
“The RBI not only reduced rates but also raised its FY26 growth guidance to 7.3 per cent, while cutting its CPI forecast to 2 per cent. A strong growth environment augurs well for Indian equities,” Khan observed, adding that India, could be a key beneficiary, though the absence of a concluded India-US trade deal remains a risk factor.
Looking ahead, global liquidity may get another lift if the CME Fed Watch Tool is anything to go by, which has indicated that the FOMC is expected to cut rates by 25 bps next week, a move that typically benefits risk assets worldwide.
Meanwhile, in the debt market, FPIs invested ₹250 crore under the general limit while withdrawing ₹69 crore through the voluntary retention route during the same period.
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