Foreign Investors Pull Out Nearly Rs 18,000 Crore From Indian Equities In August

Cumulatively, FPIs have sold equities worth Rs 1.13 lakh crore since the beginning of 2025, despite inflows of Rs 38,673 crore recorded between March and June.

The US imposed a 25 per cent tariff on Indian goods from 1 August and followed it up with another 25 per cent hike this week, prompting a sharp market reaction.

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Foreign investors have withdrawn close to Rs 18,000 crore from Indian equities in the first eight days of August, as market sentiment soured over intensifying US-India trade frictions, underwhelming corporate results for the June quarter, and a depreciating rupee.

Data from depositories revealed that Foreign Portfolio Investors (FPIs) have offloaded Rs 17,924 crore worth of shares so far this month. This follows a similar trend in July, when net equity outflows touched Rs 17,741 crore. Cumulatively, FPIs have sold equities worth Rs 1.13 lakh crore since the beginning of 2025, despite inflows of Rs 38,673 crore recorded between March and June, reported PTI.

Tariffs trigger market anxiety

Analysts say the fresh sell-off has been driven by geopolitical and trade-related concerns. “The latest outflows were primarily due to escalating US-India trade tensions, disappointing first-quarter corporate earnings and a weakening Indian rupee,” said Himanshu Srivastava, Associate Director – Manager Research at Morningstar Investment Research India.

The US imposed a 25 per cent tariff on Indian goods from 1 August and followed it up with another 25 per cent hike this week, prompting a sharp market reaction. “This spooked the markets and FPIs, leading to a massive sell-off in Indian equities,” observed Vaqarjaved Khan, CFA, Senior Fundamental Analyst at Angel One.

Global yields lure foreign money

Alongside tariffs, the rise in US Treasury yields has contributed to the outflow of foreign capital. Higher yields make US treasuries more attractive, pulling funds away from emerging markets such as India. “Rising US Treasury yields also led to foreign money moving towards treasuries,” Khan noted.

Debt markets see modest inflows

While equities have borne the brunt of foreign selling, the debt segment has seen some interest. FPIs invested Rs 3,432 crore in the debt general limit and Rs 58 crore under the voluntary retention route during the same period.

Outlook remains cautious

Market experts expect the cautious approach from FPIs to persist in the near term, with trade negotiations and tariff developments likely to dictate the mood. “Going forward, FPI sentiment is expected to remain fragile and in risk-off mode, with tariffs and trade negotiations emerging as key factors to watch out for in the coming week,” Khan added.