Tariffs Aftermath: FPIs Withdraw Rs 10,355 Crore From Indian Equities In April So Far, See What Comes Next

This pullout follows a short-lived buying spree seen in the last leg of March, when FPIs infused Rs 30,927 crore into Indian equities between March 21 and March 28.

Investors will now turn their attention to domestic policy cues, particularly from the Reserve Bank of India (RBI), which is expected to issue its monetary policy statement soon.

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Foreign portfolio investors (FPIs) have pressed the brakes on their India equity exposure, pulling out Rs 10,355 crore from the stock markets during the first four trading sessions of April. The sudden reversal in sentiment comes on the back of  sweeping tariff announcements by the United States, which have sent ripples across global markets.

This pullout follows a short-lived buying spree seen in the last leg of March, when FPIs infused Rs 30,927 crore into Indian equities between March 21 and March 28. That inflow  temporarily cushioned March’s overall net outflow, bringing it down to Rs 3,973 crore, as per data from depositories.

The months prior had already seen sizable exits — Rs 34,574 crore in February and a significantly higher Rs 78,027 crore in January, reported PTI.

Global Jitters Shake Market Confidence

The tariff measures announced by the US — including a baseline 10 per cent levy on all imports and an even sharper 25 per cent duty on automobile imports — have amplified investor unease. India, along with other countries, was hit with a steep 26 per cent reciprocal tariff, and could be directly impacted by the policy shift.

“The tariffs, which were much steeper than anticipated, raised concerns about their broader economic impact,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He warned that such aggressive measures may not only fuel inflation in the US but also bring the risk of stagflation into sharper focus.

The global sell-off was swift and sharp, with major US indices like the S&P 500 and Nasdaq shedding over 10 per cent in just two trading days. In parallel, the dollar index dipped to 102 — a move that, according to Vijayakumar, could prove favourable for capital inflows into emerging markets like India.

All Eyes On RBI's Monetary Policy Ahead

Investors will now turn their attention to domestic policy cues, particularly from the Reserve Bank of India (RBI), which is expected to issue its monetary policy statement soon.

“Going forward, market participants will closely track the long-term impact of the proposed tariffs, along with upcoming announcements from the Reserve Bank of India (RBI) regarding its monetary policy stance amid expectations of a potential rate cut,” said Manoj Purohit, Partner & Leader, FS Tax, Tax & Regulatory Services, BDO India. “These developments will play a crucial role in shaping investment strategies for the upcoming cycle,” he added.

Meanwhile, the retreat wasn’t limited to equities. FPIs also exited Rs 556 crore from the debt general category and Rs 4,038 crore from the voluntary retention route. With the cumulative equity outflows for 2025 now at Rs 1.27 lakh crore, foreign investment behaviour remains highly sensitive to global economic shifts and policy signals.